Johannesburg - Telkom’s announcement that it would piggyback on the open-access fibre network of Vumatel to offer its products in 21 new suburbs in Gauteng would pave the way for similar deals with independent providers countrywide and in other fields such as wi-fi access, a leading telecoms industry analyst has predicted.
“This is great news for South African consumers,” said Steven Ambrose, the chief executive of Strategy Worx Consulting. “It will offer consumers more choice and, over time, lead to increased competition as consumers will be able to easily switch between service providers on the same fibre network.”
Telkom’s decision to partner with erstwhile competitor Vumatel was announced on Monday and marked a dramatic change in direction for the 39 percent state-owned company and its wholesale network provider, Openserve. Until now it had been in a fierce land-grab with Vumatel and a growing host of independent fibre providers for neighbourhoods most receptive to fibre-to-the-home deployments.
According to Ambrose, Telkom’s change in tack was inevitable, with chief executive Sipho Maseko signalling the move as early as July last year when he remarked they faced “relentless pressure” from smaller, more nimble fibre providers that were able to cherry-pick the most lucrative suburbs from under its nose.
The telecoms giant’s unbundling of its wholesale and networks division into the revamped, autonomous Openserve last October paved the way for the Vumatel deal and others, Ambrose said.
At the time, Openserve vowed to be “fair, equitable and transparent”, treating all licensed operators equally to ensure a level playing field and better connectivity for South Africans. “What we’re seeing this week is the first fruits of the seeds sown back then. I predict we’ll see more in the coming months.”
Not only would this include similar agreements with independent fibre providers in other provinces, but it could extend to other means of connectivity such as wi-fi. “I wouldn't be surprised to see Openserve striking a deal with wireless hotspot providers like AlwaysOn or WirelessG to offer its services on their networks and vice versa,” said Ambrose.
While Telkom has not commented on specifics of further deals, it said its partnership with Vumatel would help it reach more consumers in more areas across South Africa.
It said through Openserve, it already had the “most extensive fibre network footprint” in the country with access to more than 81 000 homes and that Openserve remained committed to its goal of reaching 1 million South African homes by 2018.
“While Openserve holds the lion’s share of the national fibre footprint, there are currently areas not covered by their fibre network,” said Telkom Retail chief executive Attila Vitai. “To this end, it makes… sense to leverage the networks of other fibre network providers to ensure that our customers in these areas can be served immediately.”
Vitai said Telkom would consider the commercial viability of dealing with other network infrastructure providers to reach even more areas across South Africa.
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