World Telecommunication Day 1998

May 4, 1998

Bridging the Urban-Rural Gap

Wireless links are to help extend telecoms access to rural South Africa.

Wireless technologies are set to play a major role in the bridging of a great division in South Africans' access to telecommunications. The gap is between the country's central cities, which have subscriber densities of 25 connections per 100 residents, and its rural areas, with densities up to 250 times lower.

The country as a whole had 10 phone lines per 100 people in 1996.

Ambitious expansion goals

Telkom SA Ltd., the country's recently privatized telecommunications operator, has set itself the ambitious goal of doubling its customer base by 2002, from 4.26 million to 7 million, at an expenditure of 53 billion rand ($10.5 billion).

Now partially owned by Telkom Malaysia Bhd. and SBC Communications Inc. of the United States, the company wants to realize two-thirds of this expansion in South Africa's rural regions.

Telkom SA's move has come as a result of a mix of competitive pressures, technological breakthroughs and forward-looking policies, explains Anthony Maher, a member of the board of directors of Siemens AG's public communication networks division.

Rural market's potential

''South Africa's non-urban areas represent a market with a great breakthrough potential,'' says Mr. Maher. ''Telkom SA, which will lose its monopoly on standard telephony services in 2002, is keenly aware of that fact. It is also aware that access to telecommunication services constitutes an essential prerequisite for the development of such areas' business bases.''

He adds: ''Today's advanced wireless local technologies come with features that make it eminently cost-feasible for Telkom SA - and for other existing and emerging providers in Africa - to set up and operate such systems.'' The systems use radio links rather than wire lines to connect homes and businesses to switching stations.

The use of wireless local technologies eliminates the need for wireline-based networks, which require very large capital expenditures. ''Wireless local systems feature low capital loading and short times to revenue,'' says Mr. Maher. ''They also display a great deal of flexibility - an indispensable feature for areas making the transition from no or low access to being full parts of the world's telecoms grid.

''These transitions generally generate their own growth. What is needed are systems able to grow and develop with this demand - and to do so without disrupting service. We've met this demand by developing and producing access systems, including DECTlink, CDMAlink and Ultraphone, all of which are fully compatible with each other.''

Siemens has set up a number of wireless local systems in southern Africa.

Says Peter Holford, marketing manager at Siemens Telecommunications (Pty.) Ltd., the company's telecoms subsidiary in South Africa: ''After having successfully undergone the startup and trial phases, our DECTlink systems in South Africa, Namibia and Swaziland are now in the process of being expanded. Our CDMA [code-division multiple-access] technology is widely available in the region. An Ultraphone system is in place in Namibia.''

This depth and breadth of wireless-related business activity represents one of two key assets the company is deploying in vying for a piece of South Africa's telecoms market. The other asset is Siemens Telecommunications (Pty.) Ltd.'s track record in the non-wireless communications sector and in the mobile segment of the wireless market.

Upgrading technology

''Siemens has built itself into a major producer in and supplier to South Africa's telecoms sector,'' says Mr. Holford. ''Our company has developed the EWSD fully electronic digital public switching system now in use in southern Africa. It now links 5 million ports. We've also installed in South Africa the world's longest SDH (synchronous digital hierarchy) fiber optic telecommunications link. It connects Cape Town and Johannesburg, which are located 1,538 kilometers [954 miles] apart.''

Mr. Maher points out that advances in the development of telecoms markets in sub-Sarahan Africa are not limited to southern Africa.

''One highly interesting sub-Saharan market is Eritrea,'' he says. ''The country is taking a very pragmatic approach to developing its telecommunications infrastructure, one featuring the use of wireless systems.''

Terry Swartzberg