Telkom customers won’t get to roam on Rain

Telkom customers will not be able to roam onto Rain’s network as part of the newly announced roaming agreement between Telkom and Vodacom.

Vodacom Group CEO Shameel Joosub said in an interview with TechCentral on Monday that Rain’s network is specifically excluded from the roaming agreement his company signed last week with Telkom.

Vodacom and Rain have a national roaming agreement, which the former uses to help offset capacity constraints on its own network.

Last week, Telkom and Vodacom signed a new, multibillion-rand roaming deal, with migration to begin in December and full switchover planned by mid-2019. The agreement followed Cell C’s decision to end its roaming deal with Vodacom in favour of one with MTN South Africa, which expires in 2020. Telkom’s roaming agreement with MTN will be allowed to expire next year.

Telkom customers will soon be able to roam on Vodacom’s 4G network, whereas the agreement with MTN was restricted to the slower 2G and 3G technologies. The agreement extends to facilities sharing, too, meaning that Telkom and Vodacom will share infrastructure.

The agreement with Vodacom includes seamless handover, meaning a call involving a Telkom customer won’t drop if it is passed by a Telkom tower to a Vodacom tower. There are also no geographic restrictions as there are in the deal between Cell C and MTN. This means that even if a Telkom subscriber is in Johannesburg, and has Telkom signal, they can still choose to roam onto Vodacom’s network if they prefer.

Joosub said the deal with Telkom offsets the loss of revenue from Cell C “to a large degree”. It also gives Telkom “good potential to grow” while reducing costs for Vodacom. The contract term is five years for roaming and 10 years for infrastructure sharing.

Risk

A risk for Vodacom is that consumers could increasingly opt for Telkom, which has more aggressively priced tariffs, while taking advantage of Vodacom’s better network through the roaming arrangement. But Joosub said the deal excludes 5G, which Vodacom hopes to begin rolling out soon. It also brings cost benefits to Vodacom.

However, he conceded that Vodacom will need to do more to reduce its retail tariffs. “We are cognisant of the fact that our prices have to be competitive. We have introduced a number of offerings to ensure our pricing is competitive, though there is still more to do to be honest.”

He pointed to Vodacom’s hourly, daily, weekly and fortnightly prepaid offers, which he said are already very competitive. Some 80% of its prepaid sales are made up of these offers.

Getting access to additional radio frequency spectrum, however, is crucial if Vodacom is going to reduce its prices quicker, he added. “Right now, we are not investing optimally. A site can only handle so much capacity. When you run out of capacity, you have to get more sites, which becomes very expensive. If you have access to spectrum, you can carry additional capacity on those sites.”

The 2.6GHz band, which is expected to become available in the second quarter of 2019, will help Vodacom achieve that in the cities, while the 700MHz and 800MHz bands — which will only be available after South Africa has completed its long-delayed digital terrestrial television migration project — will help reduce costs in the rural areas, while also providing stronger coverage in urban centres. — © 2018 NewsCentral Media