MTN to roll out its fixed network

mtn to roll out its fixed network


johannesburg - mtn south africa will spend up to r1.3 billion to build fixed-line infrastructure throughout the country after successfully completing a pilot project between sandton and rosebank in johannesburg.

mtn is entering the fixed-line space to cut operational and customer costs; offer converged fixed-line and cellular services to clients; and meet the corporate demand for internet bandwidth that telkom is unable to meet.

the massive roll-out plans come four days after mtn group said it was in discussions to acquire certain assets of telkom, which is reviewing its 50 percent stake in mtn's rival vodacom.

mtn group chief executive phuthuma nhleko said last month that the company would keep an open mind on opportunities to increase its customer base in the corporate market.

mtn has been running a pilot fibreoptic cable between rosebank and sandton over the past two months to link stockbroking firms and the jse. it spent r10 million on the project.

the new 5 000km fibreoptic cable network will stretch throughout major cities and will be completed by 2009.

mtn sa managing director tim lowry said on friday that the demand for data services was "placing huge requirements on our transmission network; this need cannot be met by current suppliers".

he said mtn would consider partnerships with vodacom or neotel, the second fixed-line operator, to build the cable.


the partnership would be on an equal access basis.

the final costs of the cable would be determined after the tender process to identify potential suppliers of equipment was finalised in november.

vodacom plans a r7 billion investment in building fixed-line cables over the next five years.

since vodacom's plans are yet to take off, mtn is set to be the first cellular operator to become an alternative fixed-line internet data provider.

"it will be a bit of a turf war" as mtn, vodacom and neotel started offering the services, said mike brierley, the managing director of network solutions at mtn sa. he added that prices would plunge as a result.

mtn will consider whether to sell spare capacity to other players. under its current licence, it is allowed to provide its own telecoms network for its needs and lease out excess capacity.

mtn group has experience in the fixed-line business: it has built networks in ghana and nigeria and runs a fixed-line business in uganda.

asked why mtn was building its own network while it was in talks to acquire assets from telkom, lowry said that until "something changes, it's business as usual … we will decide what to do if the situation changes."

he admitted that acquiring an existing asset was the quickest way to enter the fixed-line market.