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Telkom Wholesale and Networks: a key investor in SA's broadband ecosystem

Telkom Wholesale and Networks is investing R12 billion in its Next Generation High Speed Broadband Network to ultimately support South Africa’s broadband ecosystem at large.

Mr Alphonzo Samuels, Acting Managing Director: Wholesale and Networks, says that free DSL speed upgrades during 2012 and 2013, as well as an effective IP Connect price reduction of 43% in the last year, are the most visible elements of Telkom’s commitment to invest in Broadband.

There is, however, much happening behind the scenes with significant investment in transport, aggregation and access networks supporting the Broadband ecosystem, says Mr Samuels.

“The evolution of the Telkom network is ongoing, and the impact of our deployed infrastructure has done much to grow the adoption of broadband in South Africa. As the country’s foremost supplier of wholesale network products and services, we have been committed to enabling our customers to deliver on the connectivity demands that South African’s have come to expect,” he says.

Telkom recently announced DSL speed upgrades, at no additional cost to ISP’s, which will be finalised in February 2014.

“This investment is important for the evolution of broadband in South Africa and the cost carried by Telkom Wholesale and Networks was not passed to the industry,” explains Mr Samuels.

He points to continuous investment in current Broadband Access Technology, ADSL 2+, to ensure lower costs and provide higher quality throughput to fixed broadband subscribers. The cost of this was also not carried over to the OLOs on the retail end.

“Simultaneously we have also invested in new generation broadband access technologies such as VDSL, PON (Passive Optic Network) and Active Ethernet. The deployment of Fibre to the Home and Multi Service Access Nodes initiatives is aimed at delivering even higher speeds to the industry. This will ultimately drive the demand of rich media content and will enable ISPs to compete with mobile broadband offerings via LTE,” explains Mr Samuels.

New investment in transport and aggregation technology, Dense Wavelength Division Multiplexing and Broadband Network Gateway deployment in the network core has reduced input costs. “This will contribute to the broadband ecosystem by providing a world class IP Network that will support the drive of rich media content bundled with high speed DSL Access offerings,” he predicts.

“Lastly, as part of our IP NET investment, we have provided a fully redundant IP NET overlay that ensures end to end reliability as part of the end user experience in the internet and virtual private network market.”

Looking back at 2013, Mr Samuels notes that Telkom Wholesale and Networks has been instrumental in driving down the cost to communicate whilst still enabling Other Licensed Operators (OLOs) and ISP’s to deliver quality broadband at higher speeds to their end user

He further states, “Enhancing the network and the broadband experiences is predicated on the requirement to make equitable returns on our investments in the broadband ecosystem.”

“It is important to acknowledge that the broadband ecosystem will not evolve without significant investment by all players, and not Telkom alone. Without substantial investment participation by the industry, including OLOs and ISPs, our efforts, from a wholesale perspective, will not realise the full benefit intended for the end users.”

“It has been a challenging year for Telkom Wholesale and Networks but I believe that we have made significant strides in the investment of ICT infrastructure in South Africa. I am confident that we have done much to provide the necessary undercarriage elements to our wholesale customers to enable them to build quality fixed broadband offerings in a commercially sustainable way. We remain committed to continuing our investments in the broadband ecosystem and to drive down the costs of communication,” concludes Mr Samuels.

Telkom is a leading communications services provider in South Africa. We had consolidated operating revenue of R16.8 billion and normalised profit after tax of R1, 683 million for the period ended 30 September 2015. Total assets amounted to R41.9 billion and equity attributable to the owners of Telkom to R23.5 billion as of 30 September 2015. The group generated normalised free cash flow of R1.4 billion for the period ended 30 September 2015.