Telecommunications companies Neotel and MTN South Africa would collaborate to install a 5 000-km fibre-optics cable, to service South Africa’s major cities, the two firms announced on Thursday.

The cable would be fully installed within the next two years, and would cost between R1,7-billion and R2-billion.

MTN South Africa MD Tim Lowry said that this was a landmark agreement and was the largest collaboration in the South African telecommunications industry to date.

“This is a complex project, and pooling our engineering resources and our project management resources makes sense.”

The two-year project’s costs would be equally shared between MTN and Neotel. Lowry estimated that by combining the two companies’ resources, each company would be saving between R400-million and R500-million.

The project would be divided into several phases, with the first phase offering connectivity between Johannesburg and Durban, and eventually linking up to Richards Bay where the East African Submarine Cable System (Eassy) and Seacom will be landed.

The first phase was likely to take about seven months to complete, and would cost an estimated R200-million. Construction for this phase would start in the first week of March, with the completion date scheduled before the start of the 2010 FIFA World Cup.

Other phases would link Durban with Port Elizabeth, Port Elizabeth with Cape Town, Ladysmith with Polokwane, and Polokwane with Pretoria.

Lowry said that besides reducing reliance on fixed-line telecoms operator Telkom, which had been experiencing difficulties with meeting demand, the collaboration and eventual infrastructure would reduce operating costs for MTN by an estimated R200-million.

The infrastructure would also allow Neotel to operate with a measure of redundancy for its existing network and would connect the company with the Eassy and Seacom cables.

An engineer for Neotel said that the companies would collaborate in digging the trenches, but that each company would have its own individual fibre-optics cable and hardware to connect to the cable. The capacity of the fibre optics would also be unlimited, but the availability of that capacity would be determined by the hardware applied.

Lowry and Neotel MD and CEO Ajay Pandey agreed that the introduction of the new infrastructure was likely to bring down the costs of connectivity, and would offer the two companies the chance to become self-sufficient.