Telkom's grand design.
Telkom, South Africa's telecommunications giant, has been steadily extending its sphere of operations to include the entire continent of Africa. Now it has exciting plans to virtually revolutionise the entire telecommunications system. Tom Nevin has been talking to Telkom's top brass.With the election of President Nelson Mandela, doors that had hitherto been locked against South Africa by a united African stand against apartheid, began opening. Developments came at a speed that is nothing short of remarkable. South African expertise, technology and equipment is being welcomed into markets it once only dreamt about. Among the South African companies that were quick to take advantage of the new opportunities is Telkom. In a few short years, it has not only established a strong presence in capitals throughout Africa, that presence is growing by the day.
"The opening up of South Africa has brought a multitude of other business opportunities to Telkom," says Managing Director, Dr Brian Clark. "There is an urgent need to cooperate with other African operators and uplift the continent's telecommunications infrastructure."
"We were a little nervous at first," concedes Mr Marcel Raath, Chief of Telkom's newly formed International Business unit. "But we went into the rest of Africa with the aim of creating partnerships with operators to the north of us. We have a lot to offer them, just as they have much to offer us. By thus working together, we can turn Africa into one of the most exciting telecommunications prospects in the world."
Telkom's Chairman, Mr Advocate Dikgang Moseneke, is equally committed to a strong association with the rest of Africa.
"Telkom is well positioned to make a significant contribution to the development of telecommunications capabilities of other countries in Southern Africa, and of countries further to the north," maintains Mr Moseneke. "As we strengthen our own capabilities, we'll do our best to ensure that the benefits extend throughout the region. We strongly believe that great mutual benefit can be derived from cooperation with other telecommunications providers in the region."
One of Telkom's major goals is its slice of the highly lucrative 'hubbing' (the relaying of inter-African transit telephone traffic) business. Traditionally, African hubbing was routed via telecommunications companies in the northern hemisphere. The business is worth no less than R2bn per year. "Telkom would benefit greatly by capturing just a fraction of it," says Mr Raath.
South Africa has ample capacity in landlines and cables and through its satellite facility at Hartebeeshoek in Gauteng. Already, SA's terrestrial cables link the sub-continent with Europe via Madeira, while one to the Far East is in the planning stages.
One of the pivots in the grand intra-African connect strategy is the Regional African Satellite Commission (RASCOM) which is made up of a consortium of African countries. The first RASCOM satellite, the INTELSAT 804, is set for launch in the middle of next year. It will replace the nine satellites that African currently depends on. The new satellite will then route calls and data within Africa rather than via Europe and north America. Cheaper, direct links between African countries will be the result.
Telkom then wants to go a step further and link the intra-African RASCOM satellite network to its planned South Africa - Far East (SAFE) submarine fibre optic cable. If all goes to plan, the SAFE cable will connect Africa directly to the Far East in 1999.
But Telkom has also got its eye on business from the north. "There is every reason," says Mr Raath, "for operators in the north to switch to Telkom's services. For one thing, there's a distinct price advantage". For another, Telkom is dangling a sackful of carrots that service providers in the North will find hard to resist: South Africa manufactures telecommunications equipment that is compatible with African conditions and Telkom's state-of-the-art training facilities at Olifantsfontein, near Johannesburg, offers academic and hands-on tutoring to technicians and operators. The courses cover all aspects of telecommunications. Trainees from all over Africa have been enrolling.
The training facilities have also become a valuable sales aid for Telkom. Their new export section is already filling up order books for software and even complete exchanges. "Wherever equipment is needed to streamline bilateral communications and the country in question can't afford it, we do what we can to help," explained Mr Raath.
Telkom has accepted the challenge of connecting the vast and remote regions of Africa, and is constantly exploring means to bring telecommunications into these areas. One of these is the Very Small Aperture Terminal (VSAT) which is an easily portable and erectile communication facility and ideal for remotely situated industries, such as mining, and services, such as clinics. The VSAT sends a signal to an orbiting satellite which beams it to the receiving satellite station at Hartebeeshoek and routes it to its destination.
VSAT technology, fairly commonplace in developed countries, is new to Africa, mainly because of the lack of necessary satellite backup facilities. Conditions are now rapidly improving. The launch of PAS-4 by PanAmSat is now providing VSAT compatible, high-power C and Ku-band coverage to Africa. Telkom's VSAT systems are currently operating in Nigeria and Namibia.
Telkom has also become Africa's biggest investor in I-CO Global Communications Limited, an affiliate of Inmarsat. The company provides a global, hand-held voice-and-data service which uses satelite technology. Early next century Low Earth Orbiting (LEO) and Intermediate Circular Orbit (ICO) satellite systems will offer customers voice, facsimile, paging, positioning and data transfer services where fixed and mobile cellular services are available. (See African Business, March, 1996).
However, foreign investment is vital if Telkom is to realise its ambitions for both South Africa and the rest of the continent.
"The tendency for foreign investors is not to view South Africa in isolation, but measure its future prospects against trends elsewhere in the region." says Chairman Moseneke. "However, there is appreciation for the country's potential role as a gateway into Africa. South Africa cannot, as it has done for so many years, afford to live in isolation."
Mr Moseneke believes that inter-regional economic cooperation is vital if Africa is to develop its potential, and that the SADC countries should be a primary focal point. He maintains that, together with information technology, telecommunications is vital to development.
"In fact, it forms an indispensable backbone for the development of all sectors - first as an enabling tool, making business more competitive, and secondly as an agent to improving the quality of life of the people."
An integrated telecommunications network for the SADC region would greatly enhance business efficiency and directly impact on the quality of life - from education, healthcare and social services to security and community development. An integrated infrastructure would also allow the region to compete internationally and provide the leverage of a unified block to negotiate better finance and tariff structures for international telecommunications services. Human resource development will be given special attention.
"Foreign consultants, who have to be paid out of limited foreign exchange and who rob the region of valuable on-the-job experience, are used too often by African countries," says Mr Moseneke. "A harmonised approach to human resource development will bring about enormous savings and will expand the much needed skills base."
South Africa's position as the telecommunications power-house of the continent brings with it the responsibility to play a major role in assisting in the development of the sub-Sahara hub, adds Mr Moseneke.
"An integrated telecommunications infrastructure will lead to a more stable socio-economic environment and ultimately to a better quality of life. It is possible to achieve these goals but the development cooperation will have to be the short-term focus point."
Domestically, Telkom has set itself some stiff targets. One of these is Vision 2000, a project to provide some two million lines in South Africa's under serviced areas, one million lines in areas with well-developed infrastructure and a further million lines to replace obsolete equipment. This will add 75% to the nearly four million lines currently in operation and provide South Africa with a fully digitised world class network.
Another local innovation is the fruit of Telkom's aim to provide a telephone service to people in remote areas whose only form of telecommunication is their nearest pay-phone. Of the estimated 24.5m adult South Africans, only about 7.7m have a phone at home. While there is a huge demand from those who are not yet connected, the means have to be both available and affordable.
Virtual telephony is Telkom's early response. The Voicelink service is aimed at those South Africans who cannot afford or do not have direct access to the conventional network. It allows every customer to have a telephone number without necessarily having a telephone. In other words, it's a centralised message services similar to an answering machine. Customers will be allocated a telephone number as well as a secret identification number. People can then phone this number and leave messages. The Voicelink customer in turn, is then able to phone his number at any time and retrieve his messages.
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| Author: | Nevin, Tom |
|---|---|
| Publication: | African Business |
| Article Type: | Cover story |
| Geographic Code: | 6SOUT |
| Date: | Jul 1, 1996 |
| Words: | 1566 |
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