Telkom contracts Huawei for W-CDMA rollout

25 Jun 2008

South African news site ITWeb reports that the country’s incumbent wireline operator Telkom SA has chosen Chinese equipment provider Huawei Technologies to roll out a W-CDMA-based high speed wireless network, which it plans to initially use for fixed-wireless services, but which will enable it to launch 3G mobile services in the future. The value of the contract was not disclosed, although Huawei said the planned network will have capacity for at least 100,000 connections. Deployment has already begun, and the first fixed-wireless users are expected to be connected in September, in Gauteng province, with rollouts to continue in other areas in due course. The network will provide Telkom with ‘full mobility in selected areas’, according to Huawei. Telkom previously indicated that its W-CDMA plans formed part of a mobile market entry strategy. According to local reports, an internal Telkom document outlining the project shows the incumbent expects to invest ZAR1.7 billion (USD211 million) in the wireless network over a three-year period. The new wireless system is also intended to provide more cost-effective services than cabled infrastructure as well as alleviating the problem of copper theft.

CommsUpdate reported in February 2008 that Telkom had applied for a mobile licence, despite already having a significant existing presence in the South African mobile market via its 50% stake in the country’s largest GSM operator Vodacom, which introduced South Africa’s first 3G service in December 2004 and also has operations in Tanzania, DR Congo, Mozambique and Lesotho. It emerged in mid-2007 that Telkom was considering offloading its stake in Vodacom; partner Vodafone immediately expressed an interest in upping its own stake. Negotiations are ongoing between Telkom and investors, including Vodafone, on selling all or part of its Vodacom stake.