TRANSTEL Ex Africa semper aliquid nova A new national operator in South Africa Dr Angus Hay Chief Technology Officer Transtel TRANSTEL Transtel overview l Annual revenue of around R 800m (75% internal to Transnet, 25% external) l Country-wide digital transmission network (including 3000 km fibre optic cable network) l Services for existing Transnet customers: – 60 000 digital voice ports – 20 000 data subscriber ports – 12 000 mobile radio terminals l Project management / installation experience l Satellite footprint over Africa and Europe l Customers in 17 African countries l Over 1 700 employees in 140 places
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TRANSTEL
Ex Africa semper aliquid novaA new national operator in South Africa
Dr Angus HayChief Technology Officer
Transtel
TRANSTEL
Transtel overview
l Annual revenue of around R 800m (75% internal to Transnet, 25% external)
l Country-wide digital transmission network (including 3000 km fibre optic cable network)
l Services for existing Transnet customers:– 60 000 digital voice ports– 20 000 data subscriber ports– 12 000 mobile radio terminals
l Project management / installation experiencel Satellite footprint over Africa and Europel Customers in 17 African countriesl Over 1 700 employees in 140 places
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Transtel African presence
West AfricaEast Africa
North Africa
South Africa
Nigeria
Kenya
Sudan
TanzaniaDRC
Angola
Algeria
Tunisia
Libya
ChadNigerMaliMauritania
Namibia
Egypt
Ethiopia
Botswana
Gabon
CameroonCAR
Mozambique
Madagascar
Mauritius
Lesotho
Zimbabwe
Zambia
Morocco
Somalia
Congo
Uganda
Gha
na
Ivor
y C
oast
Libe
ria
Sierra Leone
Guinea
SenegalGambia
Guinea-Bissau
Swaziland
Transtel has approx. 1700 sites throughout
the continent
Malawi
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Eskom Telecommunications
l Telecommunications is one of the core activities of Eskom Enterprises (Eskom’s non-regulated business)
l Eskom Enterprises secured and holds a significant equity stake in Tele-Com Lesotho
l Eskom Enterprises operates the Eskom Private Telecommunications Network, providing mission critical communications to the Eskom Group
l The Eskom PTN is a modern and robust telecommunications network, consisting of:– Fibre optic and microwave transmission systems– Countrywide mobile radio systems– A largely digital voice network– X.25 and frame relay data networks
TRANSTEL
30% joint
Shareholding in the SNO
Transnet
Eskom Telecoms
Transtel
Eskom
SNO
B.E.E.Other localOther
international
19%
Possible bidding consortium
Set-aside
51% in total
TRANSTEL
Trendsl Massive take-up of mobile telephony, bringing
market penetration in line with fixed telephony• Similar growth in 3G mobile is yet to be seen
l Bandwidth demand, driven by the Internet, now largely met by new fibre optic technology
• South Africa has fallen behind in this regard
l Broadband access is starting to take off globally• Has come late to the South African market
l Data continues to grow faster than voice• Particularly true for managed network services
l Boundaries are blurring: mobile/fixed/ISPl Non-realtime comms, and bundling increasingl New access methods growing, including wireless
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Regulatory timeline
SNOoperational
Communicationspolicy (reversal)
Closing date forapplications
TelecomsAmendment Bill
Invitation to Apply forSNO licence - IO
Award of SNOlicence
Invitation to Apply forSNO licence - BEE
Communicationspolicy (final)
July 2001
May 2002November 2001
September 2001
August 2001
August 2002
November 2002
Telecomscolloquium
February 2001
TelecomsAmendment Act
December 2001
Telkom InitialPublic Offering
Evaluation oflicence bids
Q1 2003
???
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Regulatory environmentl ICASA:
– Beginning to assert its independence– AT&T ruling, Telkom tariff increase
l Facilities leasing:– Guidelines broadly favourable to the SNO– Shared access to local loops now proposed
l Interconnection – Global best practicel Numbering plan – Reasonably fairl Carrier pre-select – On track for 2003l Access to spectrum – Multiple bandsl Jurisdiction of Competition Commission
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Challenges
l Spectrum issues:– 1800 MHz band, migration of existing users– Unilateral approach to spectrum pricing – Timeous availability of other wireless bands
» 800 MHz, 1900 MHz, 3.5 GHz, 10.5 GHz, 26 GHz
l Possibility of new regulatory challenges l De facto international fibre monopolyl Other legislation impacting on telecoms:
– Interception and Monitoring Act– Electronic Commerce Act
•Commercial:• Reasonable interconnect rates: Negotiable• Simple long distance operator selection: 2003• Number portability between operators: 2005• Re-balancing of tariffs across services: Yes• Access to international facilities: Yes (at a price)• Unbundling of the local loop: Possible 2005
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Transtel and Eskom
l Transtel and Eskom Telecoms bring valuel Both are committed, long term investorsl Have analysed the opportunity extensivelyl Jointly, are already investing R 2 billionl National network will be ready to deliverl Bring local and African operating experiencel Working to ensure a successful new operatorl Eskom dependability and Transtelligence
“Know your business inside out”Dr Mohamed Ibrahim, Chairman, MSI, ITU Africa, 2001
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Sentech
l Terrestrially, likely to be client of the SNOl Competitor in some areas, partner in othersl Some concerns remain:
– International carrier is a very tough market– Need to understand the multimedia licence– No strategic equity partner in the near future
l Operational simultaneously with the SNO?l Ultimate market position remains to be seen:
– Interactive broadcaster, tier one ISP?
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Underserviced Area licences
l An innovative approach to increasing teledensity in Underserviced Areas (<5%)
l Empowerment of communities and SMMEs in the identified areas (initially 10 areas)
l Use of competition to grow the marketl Very challenging business model:
– Less than ideal empowerment opportunity– Business will depend on partnerships
l ICASA: Licences after February 2003
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Convergence
VOICE DATA
MOBILE
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Fixed-mobile
l All operators have access to 1800 MHzl Telkom and the SNO: Limited mobilityl Mobile operators: Home zone tariffsl Downward pressure on mobile tariffsl Viable, cheap alternative to fixed lines l Fixed-mobile convergence:
– Commercial relationships in the short term– Could seek alliance with mobile operator– Convergence of networks in the long term
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Access network
Network management
Services
Gateway
OS Systems
Edge
Internet Server
Core network
IP
Gateway
Edge
Edge
IN ServerTelephony Server
Services SS7BS Systems
Services
Next Generation Network
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Broadband access
l Broadband access is not “one size fits all”l Multiple technologies across markets:
– Wireless DSL, and broadband wireless– Various wireline xDSLs, subject to location– Direct fibre access, and various FTTx– DVB-IP satellite, where nothing else
l About services, and not about technologyl Business needs high, reliable bandwidthl Some residential segments just as demandingl Over 100 million broadband users in the next
