South Africa - Telkom, having sold its stake in Vodacom, will launch a mobile operator later this year with national roaming on MTN

[iafrica] Telecommunications group Telkom said on Monday that it remains on track to launch its mobile service in 2010.

Speaking at a teleconference as part of the company's annual results announcement on Monday, Reuben September, Telkom Group CEO confirmed that the launch remained on track for 2010, although the he did not specify a date.

"Telkom is at an inflection point with growth in traditional fixed-line voice revenues declining. The majority of global fixed-line incumbents have discovered that a successful operation requires an integrated mobile business. We believe that there is a market opportunity in South Africa as mobile voice and especially mobile data are still experiencing growth," the group said.

Defensive strategy

It said that a product range spanning both mobile and fixed value pools would enable the group to defend itself more effectively against competitors and to grow revenues.

Telkom said it planned to use mobile technology to offer fixed-line services in areas where it was experiencing operational challenges such as copper theft, breakages, slow copper roll-out to new greenfield areas, etc.

Telkom recently signed a national roaming agreement with MTN covering services such as Voice, 2G and 3G data, SMS, MMS and USSD on a national basis. "In addition, Telkom will also offer a full international roaming service at launch through another established and experienced international service provider.

"To take these services to market, Telkom is required to negotiate mobile interconnect agreements with other mobile and fixed operators. These negotiations are at an advanced stage," it said.

Base station rollout

Telkom said it had ordered 2000 base stations, which are in the process of being constructed in the first year.

"We plan to have 40 percent of our own population coverage at launch which will be grown as required over five years. Full national coverage will be provided through the roaming agreement with MTN".

It pointed to a capital expenditure of R6-billion over five years, as a requirement to implement mobility.

"We are negotiating innovative financing structures with our suppliers in order to potentially reduce our capital investment in favour of operating lease-type payments which include technology renewal.

"We are also continuing to negotiate arrangements with distributors and retailers," Telkom said.

Growth in subscribers

The telecommunications group pointed to 16299 W-CDMA subscribers at the end of March 2010, an increase of 210.3 percent from 5253 subscribers reported at March 2009, who were provided with mobile data services and fixed look-alike products in those areas hard hit by copper theft.

Telkom will initially offer prepaid, postpaid, hybrid voice, and hybrid data services provided by a unified 2G voice and data and 3G voice and data network.

Telkom set to go mobile