The alliance is reputed to be the first in southern Africa between a bank and a telecommunication provider.

Parts of the R420 million expenditure are already budgeted for in the normal operational costs of telephone and dataline services, as well as an investment from Absa in satellite technology. In return, Telkom will provide guaranteed service levels and reduce costs through a number of new technology initiatives. It is estimated that the deal will save Absa up to R38 million in this financial year.

The partnership is based on a Memorandum of Understanding (MOU) signed by Nallie Bosman, group chief executive of Absa and Sizwe Nxasana, chief executive officer of Telkom.

Under the agreement, Telkom will guarantee uptime of 99.5% on satellite connections and 99,7% on the Telkom hub, a significant improvement on the 98.7% uptime contract currently in place.

Dataline rationalisation and Absa/Telkom account consolidation will take place, as will capping of Telkom rental rates on identified Absa mission critical datalines, the availability of skilled technicians in all major metropolitan areas and a 24-hour Telkom helpdesk.

The bank will increase its satellite links into Africa as it expands operations on the continent. Such satellite links will also be used to upgrade its domestic service. In addition, Absa will also convert some 800 automated teller machines (ATMs) in South Africa to satellite connections.

The alliance will also provide Absa access to the Primenet internal telephone service which will establish new voice links within Absa’s network of outlets and offices at significantly reduced costs and with enhanced security and monitoring features.

Louis von Zeuner, Absa Group executive director responsible for service delivery, says: "Absa is guaranteed extremely high service levels and connectivity, which is critical for our domestic and internal voice and data networks."