New deal capitalises on telecoms deregulation - delivers first carrier-neutral co-location service provider in South Africa

Spescom has entered into a strategic partnership with NewTelco GmbH to create NewTelco South Africa - a carrier-neutral co-location services provider. The new company takes advantage of telecoms liberalisation in South Africa and offers those local, regional and international carriers with a presence, or wanting to establish a presence, in South Africa an independent telecoms 'hub'. Because the co-location centre is carrier-neutral, users are free to shop around among carriers present in the centre and find the one that best meets their requirements. They are not restricted by the limited services that any one carrier may provide.  This will remove any commercial 'bias' that may exist in a carrier owned centre.
NewTelco South Africa is set to launch into full operation in the second quarter of 2010.

Says Thomas Makore, of Spescom: "More than 80% of the voice traffic generated on the African continent goes through South Africa. This new facility will offer local, regional and international carriers a fast, cost efficient, carrier grade, reliable point of presence (PoP) in South Africa to switch customer traffic seamlessly and inexpensively in the region and provide a transparent connection to international destinations"

Previously, carriers operating in South Africa were forced to make use of the services of the incumbent carrier. The awarding of ECNS licenses now allows service providers to build their own network infrastructure and carry third parties' traffic. Spescom's license will be utilised by NewTelco South Africa in the provision of these co-location services.

Explains Makore: "Carrier neutral co-location essentially provides carriers with a telecoms hub or 'market place' where they interconnect with any other carrier who has a presence in that market place. Interconnections are unrestricted and incoming carriers are not compelled to make these interconnects via secondary, usually expensive, hubs as was previously the case. In addition, co-location provider NewTelco South Africa, leaves the negotiation of interconnect fees to the carriers themselves, without influencing them in any way."

Another important part of our NewTelco South Africa's value proposition is the fact that NewTelco GmbH has five other neutral carrier co-location hubs in major world capitals, namely Frankfurt, London, New York, Vienna and Kiev, exponentially extending the value for local telecommunication customers.

Says Matthias Hartman of NewTelco GmbH: "With the arrival of deregulation, more international carriers, small and large, will be looking to establish a point of presence (PoP) in South Africa, effectively building a platform for their customers to interconnect directly with those using the services of local carriers. Similarly, local carriers will want to switch the calls of local customers seamlessly and inexpensively to subscribers using the networks of international carriers.

"A carrier independent telecoms hub or 'market place' will drive competitiveness and give local and international carriers the flexibility to exploit the growing telecoms market."

This is a goal that New Telco GmbH has already successfully achieved with the establishment of a carrier independent co-location hub in Kiev. Says
Hartmann: "Our Kiev facility is the most important telecoms interconnect hub in the Ukraine. It is the first stop for any telco entering that country because it offers a neutral service, a broad range of interconnectivity and reliable, consistently high quality of service.

"New Telco South Africa will be able to offer the same quality of service.
It marries the telecoms expertise, knowledge of the region and strong relationships of Spescom with the global experience of New Telco GmbH. The partnership offers New Telco GmbH an opportunity to expand its offering to the African continent, while New Telco SA customers can leverage the interconnectivity that the German company has already established across the globe with over 1000 carriers.

Emphasises Makore: "New Telco SA will not compete with existing network providers; it offers a complementary value added service. The company will initially target regional and international carriers and second tier carriers that choose not to build their own networks - for whatever reason - offering them the flexibility and choice to interconnect to other carriers at a co-location facility that is neutral, without needing to invest in equipment, real estate and engineers, and deal with installation and maintenance issues."

Spescom's Midrand premises will house the co-location business of New Telco SA. It will be fully equipped with not only the necessary Next Generation SDH transmission equipment and STM1/STM4/STM16/STM64 ports to directly connect customers to one other, but also the backup generators, UPS' and air conditioning needed to ensure reliability and continuity. New Telco SA will also monitor quality of service, do fault management and manage interconnect service to meet stringent service level agreements.

Says Makore: "There is a definite cost benefit in making use of carrier neutral co-location services as customers will have a choice in terms of selecting long distance capacity, connectivity and negotiating price on traffic volumes. All that carriers need are a connection to our facility.
They are then connected to the carrier of their choice by our SDH multiplexer service."

There are other benefits too. Says Makore: "Carriers making use of New Telco SA's co-location service do not need any floor space / rack space, there is no outlay for onsite equipment, they do not need to install equipment, they save on equipment maintenance contracts as there is an all inclusive fee, and they benefit from the use of advanced equipment which is kept to the latest standards. In addition, the contract period is flexible.

Notes Hartmann: "We believe the time is ripe for the establishment of this service. South Africa's delayed telecoms deregulation has put its telecoms market 10 to 15 years behind its European and US counterparts. New Telco SA's services will undoubtedly assist to bridge that gap, driving down prices and increasing competitiveness within the region."