Vodacom could link with rivals

MTN and Neotel are planning to split the costs in half, while Vodacom is rolling out underground cables by itself. But co-operation between the trio would dramatically cut the costs for all by splitting the construction bill three ways.

Vodacom has not yet officially been named as a partner, probably because it is still 50% owned by Telkom, which has a monopoly over national telecoms cables. Once Telkom sheds that stake later this year, Vodacom will be free to join a project that will dent Telkom's revenues as they will no longer have to buy their bandwidth from the operator.

One source close to the deal said: “Vodacom will join in the collaboration. It can't at the moment because it has Telkom as a shareholder, but they are going through the divorce.”

Vodacom's spokeswoman, Dot Field, came close to endorsing that, saying: “Vodacom has been building metropolitan fibre networks for the past two years, and has also been closely involved in the discussions around a national fibre network. Vodacom will make more information about our transmission plans available at the appropriate time.”

The 5000km cable will link SA's major centres, with the first leg to be laid between Johannesburg and Durban.

Cost-cutting collaboration will be supported by Vodacom's other shareholder, UK operator Vodafone, which has been a pioneer in striking deals with its rivals for the sake of efficiency.

Numerous telecoms operators have debated sharing their infrastructure to cut the costs for all, but actual agreements remain rare.

Vodacom is one of the most active and began collaborating with Orange in the UK last year. The two now share their mast sites, saying the deal is better for customers, better for both businesses, and better for the environment.

Source: Business Day

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