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General Information on South Africa |
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South Africa as a Business Location |
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The Economy in Facts and Figures |
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Economic Structure in South Africa |
South Africa's Telecommunications Sector ProfileThe sweeping and profound reforms that have transformed the political and economic landscape of South Africa during the 1990s have been well documented in the international media. Although not so well documented or as historically important, the telecommunications sector in South Africa has undergone change and development no less significant to industry stakeholders. Benchmark occurrences thus far in the 1990s include the dismantling of the PTT and the subsequent creation of Telkom S.A. as the state-owned, monopoly operator, and the issuing of competitive licenses in cellular and value added network services markets.1
In addition, over the past several years the nation has been involved in ongoing discussions over the future direction of the sector, especially in regard to such important issues as competition and privatization. Following a long period of consensus building and national debate, this sometimes arduous process was culminated with the passage into law of the Telecommunications Act of 1996 on November 15. This law provides, although sometimes not as definitively as some onlookers would have liked, a framework within which the sector will be liberalized and the nation will move forward into the information age. Key features of the legislation include:
Monopoly Status Will Continue Indefinitely
While the recent legislation poses many challenges to Telkom S.A. in the long-term, it is
perhaps more "friendly" in the short-term than would have been expected based on
the policies out forth in the national policy White Paper issued in March 1996.
Specifically, the White Paper outlined a structured six-year process for the
liberalization of sub-sector markets. While a phased process of liberalization is still
expected, the recently passed law does not set any limits on the periods of exclusivity,
or continued monopoly, for Telkom S.A. in those sub-sectors in which it currently provides
services.2
Thus, for an undefined period Telkom S.A. will continue to be the sole provider of local access, public pay phone, national long distance and international services in South Africa. Another related provision in the law perceived as favorable to Telkom S.A. calls for the Ministry of Posts, Telecommunications and Broadcasting not the newly created independent regulatory body to develop the plans and time frame for liberalization of the above mentioned service sectors.
Path Cleared for Privatization
On a parallel track to the national debate on the future of telecom sector development in
South Africa, the Ministry has been moving forward with plans to sell an equity stake in
Telkom S.A. since late 1995. The passage of the Telecommunications Act will allow this
process to move forward to completion.
Although the new law does not directly mandate privatization, it does, by establishing an independent regulatory body and defining responsibilities for such important issues as interconnection and tariff setting, create an environment which will allow privatization to proceed. The ultimate form of the sale will be determined through negotiations with the selected strategic partner(s) but it is expected that a 30% equity stake along with management control will be sold to a strategic international investor or consortium.3
Phone Lines South Africa is the telecommunications leader on the African continent with approximately 5,3 million installed telephones and 3,87 million installed exchange lines. This represents 39 per cent of the total lines installed in Africa with nearly 90 lines for every 1 000 inhabitants.
South Africa has a large transmission infrastructure, necessitated by the country's vast geographical area of 1,2 million kmÓ. Covering approximately 120 million circuit-kilometers, the transmission network constitutes the backbone of all telecommunications services. Some 95 per cent of the network is digital. There are 40 000 2Mbits circuits in service. Digital microwave and optical fiber serve as main transmission media for the inter-primary network interconnecting all the major centers.
South Africa’s first electronic exchange, which came into operation in 1981, was French equipment, the SA128E. Today, 72 per cent of main lines terminate in digital exchanges. By September 1996, there were 2 097 automatic telephone exchanges in the country and a total of 4 058 800 main services, about 98,74 per cent of which were connected to automatic exchanges. All automatic exchanges are connected to the national dialling system, enabling clients to dial direct. These clients also have access to 289 manual exchanges (excluding TES and Agent Manual Exchanges) for connection to the required clients. Telkom also provides a telephone conference facility for a maximum of six participants from various centres. Telkom supplies various telephone instruments, all of which are locally designed and manufactured. It installs and transfers on average 3 750 telephone lines each working day. Telkom provides an international telephone service to 236 international destinations, 233 of which can be dialled direct. Direct circuit relationships have been established with 77 administrations worldwide. The two automatic electronic international telephone exchanges in Johannesburg use terrestrial circuits to link up with neighbouring countries and the SAT-2 submarine cable system and the satellite earthstation located at Hartebeesthoek near Krugersdorp to international destinations. More than 360 000 manually-operated international calls are handled by the Cape Town international manual service centre every month. The modern Telkom telecommunications infrastructure processes in excess of 29 000 million call units each year.4| Telephone Services on March 31 1996 *Excluding TES and Agent Manuel Exchanges Source: Telekom South Africa |
||
| 1995 | 1996 | |
| Exchanges (automatic and manual) | 1,901 | 2,096* |
| Exchange connections: Business Services |
1,321,459 | 1,580,925 |
| Residences | 2,428,300 | 2,448,671 |
| Public and card phones | 56,485 | 61,894 |
| Farm lines | 35,123 | 37,594 |
| Total: Main Services | 3,841,367 | 3,919,084 |
Telegrams can be sent to 222 international destinations. Telkom offers a telegram service via its agency, the South African Post Office, plus both national and international telex and teletex services. The teletex service offers the user office-to-office typewriter communication at a transmission speed 40 times faster than that of a regular telex. Telkom also provides public e-mail (Telkom400) and electronic data interchange (TelkomEDI) services. Telkom400 provides the customer with a mailbox which can be accessed via the Easy Access or Beltel services. The e-mail service provides both-way access to Telex and outgoing access to Group 3 Facsimile terminals, with document conversion from word processors to facsimile. 5
Gateways connecting Local Area Net-works and the Internet mail service are alsoprovided. Telkom400 has access to 49 international Administrative Management Domains and provides access from 64 Private Management Domains and 36 local area networks. Telkom EDI provides the customer with an EDI mailbox with the following facilities: translation from in-house file to EDIFACT, physical delivery via the Post Office or facsimile, as well as long-term archiving and trading relations management.
High Speed Lines and
ServicesIntegrated Service Digital Network (ISDN) was launched by Telekom in 1995. It is a fully digital service which allows simultaneous high speed transfer of live video, dat and fax via a conventional copper cable. The ISDN is currently available to 20 international operators. Data is also conveyed through the public packet-switched networks, Saponet-P and Frame Relay. At the end of 1996, a total of 6,616 users were connected to Saponet-P using 162,093 logical channels, while a total of 686 users were connected to Frame Relay. Five international connections offer access to a number of packet-switched networks in 59 countries. Triple-X access to Saponet-P is also possible at speeds of up to 14,400 bits per second. At the end of 1996, there were 14,343 dial-in users of the Triple-X services, Easy Access and Speedlink, with a further 311 users directly connected.6
Cellular Telephone
NetworksThe cell phone industry itself is continuing to grow, with about 1,500 companies involved as service providers and dealers. This figure does not include the number of suppliers catering to the industry. The cell phone industry has approximately 1.2-million active cell phone subscribers. After three and a half years the industry has more than four times the250,000 subscribers that experts predicted would be the saturated level after five years. A recent development is the introduction of pre-paid cell-phone access, which has opened up a sector of the market that the analysts failed to even consider.7
Satellite SystemsTelkom S.A. makes use of the V-Sat based satellite service, called Spacestream, in Lagos, Nigeria. The link to Telkom's South African network is made via a V-Sat (very small aperture terminal) dish. It is a multi-media distance independent service, offering voice, data and image on a single link. Some 930 V-Sat terminals are presently in service.
In 1994, Telkom initiated discussions to set up Spacestream links with a number of African countries to enable them to offer fully interactive, high-quality telecommunications services without having to make large infrastructual investments.8
Submarine Cables
Cable TVM-Net (Electronic Media Network Limited) was launched in 1986 and was South Africa’s first private subscription-television service. Today, M-Net is Africa’s premier pay-TV service, with over one million subscribers in some 37 countries across the continent. M-Net features broad-ranging programme scheduling on terrestrial analogue and digital satellite transmissions. The main M-Net channel (on analogue) concentrates mainly on movies, but also offers series, mini-series, sport (SuperSport), children’s programmes (K-TV) and general entertainment programmes. There is a daily two-hour open window from 17:00 to 19:00 when programmes are broadcast in unencoded form. Additionally, the Community Service Network (CSN) offers special programming such as East Net (for the Asian community), Canal Portuguesa (for the Portuguese community), Shalom TV (for the Jewish community) and Christian Network and Rhema TV (for the Christian community). Surplus sport is also shown on this service. The All-Africa Film Awards, New Directions (for emerging filmmakers), and the M-Net Book Prize are among the various initiatives created by M-Net to act as platforms for the exposure and recognition of creative talent in Africa. M-Net’s Red Nose Day has to date raised around R30 million for Child Welfare. Smaller welfare organisations and nongovernmental organisations (NGOs) are supported in M-Net Cares, a weekly documentary programme highlighting various charitable activities. In 1995, M-Net launched the Phutuma Share Scheme.
MIH, with its brand name of MultiChoice, developed alongside M-Net to provide the broadcaster with subscriber management services. It developed as a separate entity from M-Net to facilitate the provision of its services to other channel providers – those which were to participate in the ‘digital bouquet’. The company is strategically positioned to address the technical challenges of global pay-TV services (satellite television). MultiChoice figures showed that there were over 100 000 Digital Satellite Television (DStv) subscribers in March 1997. Over the years, MIH has achieved success in subscription television, expanding its subscriber base to cover 1,4 milion homes. Already, it provides high standards of service in over 50 countries in the European, Mediterranean, African, Middle Eastern and Far Eastern regions.
The SABC also launched a satellite package in 1996. It opted for analogue technology because the cost of the receiving equipment would be about one-third to half the cost of digital equipment. In July 1996, the SABC transmitted samples of what viewers could expect from six pay channels due in December of the same year. Viewers were able to receive the AstraPlus entertainment channel broadcasting five movies a day and the AstraSport channel, without a decoder or payment for four-and-a-half months.10
Private NetworksTranstel's network includes cable and microwave infrastructure, a direct-dialing PABX voice network, ISDN and X.25 frame relay for data communications, trunk radio networks and other mobile systems and VSAT satellite systems. Transtel fixed network in South Africa consists of 150 exchanges. Some 70% of the network is digital, the rest to be converted over time. Transtel's voice network has approximately 45,000 subscribers.
Eskom supplies approximately 60% the total electricity consumed on the African continent and like many other power utilities has its own telecommunications system to support its core business of generating and distributing electricity. Because its power plants, transmission lines ans substations are often located in remote sparsely populated areas, Eskom's communications network covers parts not served by Telkom's infrastructure. Eskom's network includes:.gif)
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Author: Felix R. Klimpacher
Last Update: April 27, 1998
This Page's URL is: http://gurukul.ucc.american.edu/initeb/fklimpa/southafrica/telepage.html