Pragma partners with SCS telecoms to target the telecoms market

September 14, 2012

In mid 2009 Pragma commenced discussions with the Space Commercial
Services (SCS) group of companies, which is headed up by Dr Sias
Mostert. This followed on from the interaction with Sias in 2008, when
he presented the keynote address in the annual AMTL conference on the
Extreme Reliability of Sunspace Satellites. The initial discussions have
since crystallised into an agreement to establish a joint venture
between Pragma Africa and SCS Telecoms, with the objective to deliver
Pragma’s well-proven ACC service into a vertical ICT market sector, with
specific focus on the African telecommunications industry.

SCS Telecoms is part of the SCS group of companies and specialises in
the application of space, satellite and related technologies for
commercial and development activities in Africa and the Middle East. The
team at SCS Telecom has vast experience in a range of
telecommunications and related areas throughout Africa. This includes
satellite communication, GSM technology and strategies, outsourcing and
managed business services.

The African telecommunications market has a very large mobile
(cellphone) component, which currently comprises more than 100 000
mobile towers and is growing at about 10% per year. However, this
landscape is undergoing rapid change, driven by the need to reduce costs
as the market matures and margins come under pressure. The past decade
represented a ‘gold rush’ – a scramble for markets and market share, as
operators set out to claim their slice of this potentially lucrative
pie. With promising opportunities becoming scarce, a wave of
consolidation and cost cutting is now taking place.

One of the major cost-saving opportunities is tower sharing, which could
save mobile operators across Africa and the Middle East about R70
billion in ongoing capital and operational expenditure over the next
five years, according to the telecoms advisory firm Delta Partners. It
entails operators collaborating to share either the active elements (the
physical network) or just the passive elements of their base stations –
including the physical tower structure, security, power and diesel

Tower sharing can be facilitated by operators forming joint ventures
or even separate tower companies to handle the management and further
rollout of network infrastructure. Operators could also sell their
towers outright to existing tower companies on a lease-back basis.

A third option would be to retain the towers, but to outsource their
management and maintenance to an organisation that could deliver such a
service at a lower cost than the operator due to economies of scale and
core business. All these options represent a golden opportunity for
outsourced physical asset management services, with a centralised ACC
service support centre connected with real-time links to base stations.
(See Figure 1 for schematic representation.)

The industry is currently abuzz with wheeling and dealing, as operators,
tower companies and service providers try to hammer out the shape of
the future. All this activity is creating opportunities for Pragma
Africa, provided that we can demonstrate telecoms expertise, which is
why we partnered with SCS Telecoms to form Pragma SCS. To get Pragma SCS
up to speed, the active role players from Pragma Africa are Karl Nepgen
(asset care service strategy and direction) and Louis Volschenk
(business development), and from SCS Telecom the participants are Jannie
van Rhyn and Peter Schulze (both engineers with hard experience in
telecom operations and management in African countries).

To date Pragma SCS has introduced its unique services to most of the
major operators on the continent such as MTN, Vodacom, Safaricom
(Kenya), Zain (Central and West Africa) as well as industry OEMs and
service providers such as Ericsson and Nokia-Siemens. In April Karl
Nepgen and Peter Schulze also attended the East Africa Mobile Conference
in Nairobi, Kenya, where promising contacts were made with leading
operators and suppliers.

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