With rivals already deploying 5G networks, Telkom’s CEO sees FWA as its key differentiator
South African wireless and wireline service provider Telkom has announced the launch of its 5G service for South Africa. What’s more, the company said it’s leaning on Huawei, the Chinese telecom equipment maker banned in the United States and other countries, to make the rollout happen.
Lunga Siyo, Telkom’s CEO of Consumer and Business, noted during a launch event that 4G “remains strong” in South Africa as the cornerstone of most customers’ mobile service. The company has been building out 5G network capacity and capability gradually over the past 24 months in preparation of a nationwide rollout.
5G is there to supplement the company’s existing telecom ecosystem, he said, adding that Telkom is focusing initially on providing 5G Fixed Wireless Access (FWA) solutions. As the demand for 5G services increases throughout South Africa, Telkom will “supplement this with suitable mobile propositions.”
“The 5G network supplements our current connectivity ecosystem, offering a diversity of connectivity solutions and improved network responsiveness,” said Siyo.
Telkom noted that its 5G service was launched through a strategic partnership with Huawei, which is providing Telkom with both equipment and support to manage the 5G rollout, Siyo indicated. Huawei is effectively banned from being used in U.S. telecommunications infrastructure buildouts over national security concerns. The U.S. government’s ban of Huawei has been parroted by numerous U.S. allies, but African nations and telecom service providers have largely continued to embrace Huawei, which provides less expensive equipment than some of its rivals.
Telkom is not the first Communication Service Provider (CSP) to provide 5G services to South African consumers. In fact, Telekom is a relatively late comer to the 5G party in South Africa. Scrappy data-only upstart CSP Rain kicked off 5G coverage in 2019. Telkom’s biggest regional rivals, MTN and Vodacom (majority-owned by international telco Vodafone) also operate 5G voice and data network in the country.
The telco companies vying for dominance in South Africa see a sizable market to address. 5G subscribers in South Africa are expected to reach 11 million by 2025, according to figures produced in 2021 by Africa Analysis. The company expected to see a strong growth uptick after the South African government officially auctioned 5G spectrum. The Independent Communications Authority of South Africa (ICASA) raised US$960.7 million in the process of provisioning 5G spectrum licenses to six qualified bidders earlier this year. Cell C, Liquid Telecom, MTN South Africa, Rain Networks, Telkom South Africa, and Vodacom South Africa submitted bids in the main auction of frequencies in the 700 MHz, 800 MHz, 2.6 GHz and 3.5 GHz bands, which followed an initial opt-in phase.
Changes have been afoot in South African telecom for a while. In July, Huge Group purchased the remaining assets of Tethys Mobile, formerly Virgin Mobile South Africa, which had been in “business rescue” since September 2020, the legal term of art for South African businesses undergoing a financial reorganization, broadly equivalent to a “Chapter 11” American business bankruptcy.
Telkom and MTN have reportedly been in merger talks since the summer. If the two companies were to merge, it would create the single largest CSP in South Africa, dwarfing Vodacom and creating a de facto duopoly in the country. That’s not all, though: Rain is also reportedly in acquisition talks with Telkom. This arrangement would be preferable to South African businesses and consumers, Rain contends, as it would create a stronger rival to MTN and Vodacom, rather than consolidating South Africa’s mobile business among two dominant CSPs.
