Sno Telecoms in Starting Blocks

By: Duncan McLeod

Clarity is at last emerging about how the newly licensed second network operator, SNO Telecommunications, plans to tackle Telkom in fixed-line telephony. But objections by Sentech over the use of frequency spectrum could scupper its hopes of providing telecom services affordably.
 

In a 51-page submission filed with the industry regulator, the Independent Communications Authority of SA (Icasa), SNO Telecom has provided insights into how it wants to go about building an alternative national access network to rival Telkom's.

If it can get access to the radio frequency spectrum it needs - and this is not guaranteed, given Sentech's objections - then SNO Telecom will build an access network using CDMA, a wireless technology that is popular in the US and elsewhere. Though it was designed as a mobile cellular technology, CDMA is enjoying growing acceptance in emerging markets as a means of building fixed-wireless alternatives to fibre or copper-cable infrastructure.

CDMA is a rival cellular standard to the GSM networks that SA's mobile operators have deployed. It is an established technology - about 300m people worldwide use it. More recent versions of the technology, faster CDMA2000 and EV-DO systems, compete with the mobile operators' UMTS (3G) networks (see table).

SNO Telecom wants to use CDMA-2000 and EV-DO to provide voice telephony and high-speed Internet access. It believes this technology offers the most affordable way of delivering telephony and Internet services to residential consumers. "We believe this technology offers the lowest cost per subscriber of any technology for voice and that it also delivers high-speed data at an extremely cost-effective rate. The combination of those two is powerful," says Transtel chief technology officer Angus Hay, who has been seconded to SNO Telecom, in which Transtel holds an effective 15% equity stake.

"Mobile technologies have been very successful in providing wireless access as an alternative to copper wireline access," SNO Telecom says in its submission to Icasa. "Globally, CDMA, including CDMA2000, has proven itself as the de facto international standard for fixed-wireless operators."

Building a CDMA network, though, will present the company, and Icasa, with a number of technical challenges. SNO Telecom wants access to the 800 MHz band but this frequency is already used by Sentech to carry terrestrial television signals. To counteract this and to avoid the need for consumers to retune their television sets, SNO Telecom has proposed geographically "interleaving" its CDMA network with Sentech's broadcast signals. It says this is technically feasible, and has already conducted a pilot in the north of Johannesburg which, it says, proves its case.

"We are of the view that the TV broadcast spectrum is being used inefficiently," says Hay. Roughly half of the radio spectrum below 1 GHz is used for television. SNO Telecom wants access to 4% of this. "We're not even saying we want it exclusively."

Hay says SNO Telecom could build a national CDMA network using the 800 MHz band without broadcasters being any the wiser. Besides, he says, it's an anomaly that SA uses frequency above 800 MHz for broadcasting. Most countries, he says, do not use frequency higher than 790 MHz for this purpose.

Sentech, however, believes that SNO Telecom's proposal is unworkable. Senior executive Johan Raath says Sentech will need access to more, not less, spectrum as it moves SA to digital terrestrial television. Though digital broadcasting is more spectrally efficient than analogue systems, government is likely to impose a lengthy period of "dual illumination" where the new digital and old analogue networks will coexist.

Raath says conclusive tests also need to be conducted to ensure there is no interference, especially with a new digital broadcast network. Sentech, he says, is not against reclassifying 800 MHz for providing telecom services in the long term, but thinks it's a bad idea to do it now. "Once the frequencies have been chosen for digital TV, that will be the time to do the tests."

Raath denies suggestions that Sentech is deliberately trying to undermine SNO Telecom. The company, he says, should consider using alternative frequency bands for its CDMA network.

But Hay says this is not feasible . If the company had to build its network at 2,1 GHz - the same frequency the mobile operators have used to build their 3G networks - then it would have to build many times the number of base stations. The higher the frequency used, the smaller the footprint per base station. Lower frequencies provide greater geographical coverage per high site. "It's bad enough we have to come in as a greenfield operation, but to expect us to have more base stations than the mobile operators . . . It just can't be done."

Sentech's argument that there could be interference between CDMA networks and television broadcasts is a poor one, Hay adds. "The density of spectrum use in SA is 5% of what it is in Europe. We could be 20 times more efficient and not have any interference."