Vodacom in R1bn railways fibre deal - TechCentral

Vodacom in R1bn railways fibre deal

Vuyani Jarana

Vuyani Jarana

A week after securing a deal with national treasury worth up to R5bn, telecommunications group Vodacom has announced it has won a 15-year contract with the Passenger Rail Agency of South Africa (Prasa) worth an estimated R1bn.

The deal, which was signed with Prasa subsidiary, ICT provider Intersite Asset Investments, comprises two major components, Vodacom said.

The first seeks to further monetise Prasa’s telecoms assets by leveraging Vodacom Business’s enterprise channel capability.

This broadly includes multiprotocol label switching; virtual private network connectivity; unified communications and collaboration; metro Ethernet fibre access; microwave access; dedicated Internet access; hosted Exchange and security information event management, Vodacom said.

The second component involves Vodacom leasing Prasa’s dark fibre-optic cables for the duration of the contract and making these assets commercially available to government and enterprises, including other carriers and mobile network operators through Vodacom’s wholesale and carrier division, it said.

“The agreement forms part of Prasa’s telecoms assets commercialisation process, which began in 2013, and is designed to support its goal to provide quality passenger rail services to commuters,” Vodacom said in a statement.

“In the past, state enterprises, including municipalities, invested in optic fibre infrastructure to meet their own consumption needs. To maximise return on investment on these assets, state-owned entities must find strategic partners with technical expertise and market reach, which is what Prasa has achieved through its partnership with Vodacom,” it continued.

“Globally, rail agencies invest in strategic telecoms assets such as optic fibre to manage locomotive traffic: Prasa is no different and has over 900km of fibre along the railway line and stations.”

Vodacom said Prasa, through Intersite, will be able to generate revenue through its fibre assets as well as on-sell Vodacom’s enterprise products and services to the wider enterprise market in South Africa.

“The revenue streams for Prasa include those realised from the wholesale lease of its fibre assets, channel commissions (when Intersite acquires customers through the agreement) as well as rebates to Prasa where its own ICT services come into play.”

Vodacom Business chief officer Vuyani Jarana said it makes sense for the company to work with partners like Prasa to “weave together existing fibre assets to create wider networks that shorten time to market”.

The Prasa deal comes after the national treasury’s confirmation earlier this month that Vodacom has secured government’s mobile communications contract. The tender is to supply as many as 1,3m government employees for four years, starting on 15 September, Bloomberg reported.  — © 2016 NewsCentral Media

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