Cell giant set to spend up to R1bn on 3G rollout

south africa's largest cellular network provider, vodacom, will spend between r800-million and r1-billion over the next two years on the rollout of third-generation (3g) base-station infrastructure.

the investment - which effectively involves an entirely new network, based on an entirely new technology for south africa - is viewed by the company as critical in securing its leadership position in a more competitive telecoms market. this increased competition is expected to emerge from a number of sources as from february 2, 2005, which is the date set by government for a dramatic overhaul of the sector.

speaking during vodacom's interim results presentation yesterday, ceo alan knott-craig said that, while the decision to embrace 3g had been made well ahead of the communication minister's september 2 liberalisation announcement, the timing of the rollout would position it well for competition, particularly in the area of high-speed data.

he argued that had it not been made vodacom could well have found itself marginalised. he added that the decision to embrace a cdma network would also be vindicated, forecasting that the currently gsm platform could well go the way of analogue technology some time in the future.

“the world of telecommunications is going to be far different in ten years from what it is today and, i believe, it will be as different as the last ten years have been from what we have today and from the ten years prior to that,” knott-craig argued.

he reaffirmed earlier statements that the technology would be ready by december and that it would take about three years to fully deploy the new network, adding that it had budgeted some r400-million during the current financial year for 470 base stations. a similar level of capital expenditure is expected in 2006, and from then on vodacom would calculate its expenditure based on market take-up.

knott-craig pointed out that the expenditure was not likely to match that of gsm, which involved an investment of some r13-billion over ten years, as many of the core systems as well as masts were already in place.

the company has been testing 3g since june this year on a test network at its midrand facility in gauteng and its century city facility in cape town. but, by december, it will have 3g services available in high-data-usage metropolitan areas, such as cape town, johannesburg, pretoria, port elizabeth and durban, as well as some coastal holiday destinations, such as mossel bay, george, plettenberg bay and hermanus.

the 3g-enabled devices will combine high-speed mobile access with internet protocol (ip)-based services, enabling fast mobile connection to the world wide web as well as opening up a plethora of other communication opportunities. in essence, 3g will offer mobility with many services that were previously regarded as 'fixed' such as video calls, surfing the internet, or playing interactive games.

knott-craig reported that its alliance with vodafone, of the uk, will enable it to accelerate the service offerings and he also confirmed that it would be giving priority to the marketing of data cards to laptop users. however, he stressed that handsets will also be available from next month.