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State awards R378m contract to Neotel2007-05-24 Neotel, the second fixed-line telephone operator, has bagged its biggest contract to date after it won a R378 million deal to install an internet-based network for the government. The State Information Technology Agency (Sita) would invest R454 million over five years to replace the redundant government network managed by Telkom, Sita said yesterday. The next-generation network would create a platform for more efficient and cost-effective services, allowing the state to offer programmes like voice over internet and telemedicine, and to connect to multipurpose community centres on a single platform. Neotel plans to offer high bandwidth capacity to link Sita's 25 sites in major cities and towns to about 3 000 government departments. Public services minister Geraldine Fraser-Moleketi said Neotel's bandwidth capacity translated into savings of about eight times the cost of the alternative offer for the contract. The government has criticised Telkom for its high costs, which made it difficult to attract foreign investment into the country. Yesterday Telkom said it had cut international bandwidth prices by 30 percent. Last year, Telkom said it expected to lose about 9 percent of its government contracts to Neotel, as well as about 15 percent of total market share. Telkom plans to spend R7 billion to install an internet-based network to diversify its offerings and compensate for shrinking voice revenue. It will also offer pay television through its high-speed internet lines. Neotel plans to spend about R11 billion on infrastructure in the next five years. The group is already offering international bandwidth capacity to more than 12 clients. The first leg of Sita's investment entails an upgrade of the government network backbone by Business Connexion, which will supply, install and support equipment supplied by Cisco over three years for R76 million. The transition to the new network is expected to start in October. The old and new networks will operate in parallel until all the departments have been connected. Source: My Broadband |
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