MTN, Neotel in major deal

Pretoria - Telecommunications company MTN and Neotel are to co-build a long-distance fibre optic network connecting major centres around the country, the companies announced on Thursday.

The network will cover a 5 000km distance, the companies said in a joint statement after signing the co-build agreement in Johannesburg.

Neotel is the country's first converged communications network operator providing voice and data services for among others businesses and wholesale network operators.

"This co-build agreement with Neotel marks the biggest collaboration in the South African telecommunications industry, and is a defining moment in the history of the country," said managing director of MTN Tim Lowry.

Ajay Pandey, CEO and managing director of Neotel, said the collaboration between both companies was a "bold step".

"We believe that this partnership is a significant milestone as we redefine the telecommunications landscape," said Pandey.

The first route of the national fibre network will extend from Gauteng to KwaZulu-Natal.

The construction of the first leg of the network is expected to begin in the first week of March while the completion date for the first phase is expected before the 2010 Fifa World Cup.

MTN spokesperson Bridget Bhengu said other provinces would be added at a later stage.

"The entire project which is expected to be completed in April 2011, will cost around R2bn," she said.

The network would provide both companies with almost infinite bandwidth capacity to carry more information (voice and data) at higher speeds over greater distances using less power than copper cables.

- Sapa