Ex Africa semper aliquid nova A new national operator in South Africa. Dr Angus Hay Chief Technology Officer Transtel.
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1 Ex Africa semper aliquid nova A new national operator in South Africa Dr Angus Hay Chief Technology Officer Transtel Transtel overview Annual revenue of around R 800m (75% internal to Transnet, 25% external) Country-wide digital transmission network (including 3000 km fibre optic cable network) Services for existing Transnet customers: digital voice ports data subscriber ports mobile radio terminals Project management / installation experience Satellite footprint over Africa and Europe Customers in 17 African countries Over employees in 140 places
2 Transtel African presence Morocco Algeria Tunisia Libya North Africa Egypt West Africa Mauritania Senegal Gambia Guinea-Bissau Guinea Sierra Leone Liberia Ivory Coast Mali Ghana Niger Chad Sudan Nigeria Ethiopia CAR Cameroon Somalia Uganda Gabon Kenya Congo DRC Tanzania East Africa Transtel has approx sites throughout the continent Angola Zambia Malawi Mozambique Mauritius Zimbabwe Namibia Botswana Madagascar Swaziland Lesotho South Africa Eskom Telecommunications Telecommunications is one of the core activities of Eskom Enterprises (Eskom s non-regulated business) Eskom Enterprises secured and holds a significant equity stake in Tele-Com Lesotho Eskom Enterprises operates the Eskom Private Telecommunications Network, providing mission critical communications to the Eskom Group 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
3 Shareholding in the SNO Transnet Eskom Transtel Eskom Telecoms Other international Other local B.E.E. Set-aside Possible bidding consortium 51% in total 19% 30% joint SNO Trends Massive take-up of mobile telephony, bringing market penetration in line with fixed telephony Similar growth in 3G mobile is yet to be seen Bandwidth demand, driven by the Internet, now largely met by new fibre optic technology South Africa has fallen behind in this regard Broadband access is starting to take off globally Has come late to the South African market Data continues to grow faster than voice Particularly true for managed network services Boundaries are blurring: mobile/fixed/isp Non-realtime comms, and bundling increasing New access methods growing, including wireless
4 Regulatory timeline Communications policy (final) Telecoms Amendment Bill Invitation to Apply for SNO licence - BEE Closing date for applications Telkom Initial Public Offering February 2001 August 2001 November 2001 May 2002 July 2001 September 2001 December 2001 August 2002 November 2002??? Q SNO operational Telecoms colloquium Communications policy (reversal) Telecoms Amendment Act Invitation to Apply for SNO licence - IO Evaluation of licence bids Award of SNO licence Regulatory environment ICASA: Beginning to assert its independence AT&T ruling, Telkom tariff increase Facilities leasing: Guidelines broadly favourable to the SNO Shared access to local loops now proposed Interconnection Global best practice Numbering plan Reasonably fair Carrier pre-select On track for 2003 Access to spectrum Multiple bands Jurisdiction of Competition Commission
5 Challenges 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 Possibility of new regulatory challenges De facto international fibre monopoly Other legislation impacting on telecoms: Interception and Monitoring Act Electronic Commerce Act Investor checklist Regulatory: A strong, impartial, independent regulator Stable, predictable licensing criteria and terms Clear, equitable regulations governing interconnect Transparent, non-discriminatory, neutral USOs 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
6 Transtel and Eskom Transtel and Eskom Telecoms bring value Both are committed, long term investors Have analysed the opportunity extensively Jointly, are already investing R 2 billion National network will be ready to deliver Bring local and African operating experience Working to ensure a successful new operator Eskom dependability and Transtelligence Know your business inside out Dr Mohamed Ibrahim, Chairman, MSI, ITU Africa, 2001 Sentech Terrestrially, likely to be client of the SNO Competitor in some areas, partner in others Some concerns remain: International carrier is a very tough market Need to understand the multimedia licence No strategic equity partner in the near future Operational simultaneously with the SNO? Ultimate market position remains to be seen: Interactive broadcaster, tier one ISP?
7 Underserviced Area licences An innovative approach to increasing teledensity in Underserviced Areas (<5%) Empowerment of communities and SMMEs in the identified areas (initially 10 areas) Use of competition to grow the market Very challenging business model: Less than ideal empowerment opportunity Business will depend on partnerships ICASA: Licences after February 2003 Convergence VOICE DATA MOBILE
8 Fixed-mobile All operators have access to 1800 MHz Telkom and the SNO: Limited mobility Mobile operators: Home zone tariffs Downward pressure on mobile tariffs Viable, cheap alternative to fixed lines Fixed-mobile convergence: Commercial relationships in the short term Could seek alliance with mobile operator Convergence of networks in the long term Next Generation Network Network management BS Systems OS Systems IP Services Internet Server Services IN Server Services Telephony Server SS7 Gateway Gateway Edge Core network Edge Edge Access network
9 Broadband access Broadband access is not one size fits all 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 About services, and not about technology Business needs high, reliable bandwidth Some residential segments just as demanding Over 100 million broadband users in the next two years: Is this the new digital divide? Rail infrastructure Suspending fibre
10 Rail infrastructure Suspended fibre Rail rights of way Directly burying fibre
11 Power lines Lashing fibre on high-voltage line Power line infrastructure Skilled Live Line Workers Helicopter Machine lashing fibre to live power line
12 The new national operator The choice of the next generation
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