Neotel dedicates R10bn to networks

By Candice Jones for Neotel
Johannesburg, 18 Jul 2008

Second national operator Neotel has committed R10 billion, over the next five to 10 years, to the development of its networks.

This is according to head of strategy Angus Hay, speaking at the presentation of Neotel's new enterprise wireless "last mile" offering this morning. "You will also see us undertake a push in coverage over the next six to 12 months," he added.

The company hopes to bring between 10 000 and 20 000 enterprise clients on board its networks. Last month, Neotel revealed it had 150 businesses connected to its network operating centre.

"April this year was the last count for consumer services, and we had in the region of 300 subscribers," said Stefano Mattielo, head of enterprise business group and the Network Operations Centre.

The company also disclosed it is targeting 50 000 customers for its consumer services segment by March next year.

Closed local loop

Neotel has started rolling out WiMax and VectaStar technologies as an option for enterprise customers to connect to its fibre backbone. Neotel was granted spectrum by the Independent Communications Authority of SA (ICASA) on the 3.5GHz (commonly WiMax) and 10.5GHz (VectaStar) bands.

This spectrum was allocated as part of the operator's initial licensing conditions, which stipulated it would be licensed under conditions that are no less advantageous than Telkom.

According to Neotel product manager for the enterprise group Marcel Steyn, WiMax has been rolled out in the Johannesburg area, primarily in the northern suburbs business areas. "The VectaStar technology has been implemented in the four major metropolitan areas," he adds.

Neotel is to issue WiMax on the 802.16d standard, which is the fixed wireless standard. Hay says the company will use the wireless services to target the enterprise market, while the CDMA networks, which are already in place, will focus on the consumer business.

Steyn says WiMax has become a globally relevant technology and he is convinced it will have a future in SA. WiMax will offer Neotel customers around 2Mbps subrates, while VectaStar will offer between 4Mbps and 10Mbps.

Can't get enough

While Hay has not promised a consumer WiMax offering, he says there would be several stipulations to meet before the company could do that. "If we were to implement a WiMax offering for the consumer, we would have to look at the implementation on the 2.6GHz band. We would also have to provide it on the 802.16e mobile standard."

ICASA recently published its decision on how it wants to allocate the 2.6GHz and 3.5GHz bands, commonly used for WiMax delivery globally. The authority decided to auction WiMax spectrum to bidders, but not before it has held a beauty contest to whittle down the list of eligible players. One of the criteria is that companies must be at least 51% empowered.

According to ICASA's decision document, each successful applicant in the 2.6GHz band will be allocated 20MHz. The allocation of 20MHz allows for a maximum of six companies to be allocated spectrum.

Hay says 20MHz is not enough spectrum to provide a national consumer service. "There should be at least 30MHz in the allocation."