The telecommunications and IT landscape in South Africa has changed fundamentally through the course of 2005 – competition is fierce, cost-cutting initiatives from large companies and restrained IT spending has led to a less than impressive growth in the IT market. In addition, a tendency from companies toward multivendor approaches has led to partnering becoming an increasingly important strategic approach.
However, in stark contrast, the telecoms market has boomed - and not necessarily as the result of technological advancement. Rather, this can be credited to amendments to the legislation governing the provision of communications networks.
So says Mardia van der Walt-Korsten, acting CEO of T-Systems South Africa, who notes that the relaxing of the provisions of the Telecommunications Act in South Africa has ushered in a new era for connectivity and is setting the scene for real convergence of IT and telecoms services and solutions in 2006.
Also noteworthy in respect of the government's commitment to service delivery to a broader cross section of the population is the fact that metropoles are in a position to secure Private Telecommunications Licences from ICASA. That, says, Van der Walt-Korsten, is a significant step in the right direction.
"Giving municipalities the capacity to operate their own wireless networks enables them to rapidly and cost-effectively extend enterprise applications to every corner of their jurisdiction. That aids the delivery of critical services such as healthcare and medicine, and dramatically increases their ability to collect fees for services such as electricity and water by taking the point of sale to the people, rather than having them expend scarce resources on taxi fares," she says.
The effect of deregulation has further positive implications for the technology industry; for companies like T-Systems which generate a significant proportion of their revenues from the provision of outsourced IT and telecommunications services, the ability to provide more affordable telecoms services and the flexibility to combine this with valuable IT solutions allows for converged and cost-effective service delivery to customers.
Van der Walt-Korsten says this will play a key part in the company's strategy for 2006. "Through this year, we have effectively consolidated the business and have established a growth plan for the New Year. Our customer retention has been exemplary, but to date acquisition has not been particularly aggressive. This is set to change with new possibilities for amongst others, application lifecycle management, which, when combined with the benefits of increased bandwidth availability, allows companies more flexibility in terms of distributed processing. And thanks to deregulation, South Africa is now ideally positioned as an offshore destination, improving its competitiveness with destinations like India and in Eastern Europe.
The anticipated Convergence Act should continue to mould the telecoms environment for the better. "The process of establishing the Act has been a participative one, and we are pleased that our representations have been acknowledged and we trust they will be incorporated; we are awaiting promulgation, but the process has certainly been encouraging. The actual implementation of the Act will, however, be open to interpretation."
Convergence, she says, is a well defined concept; a significant question that demands determination is how the difference between network service providers like Sentech and Telkom and value-added network providers, will be defined.
"That question is usually simply expressed in terms of whether or not VANs will be able to self-provide, that is, to own and operate their own enabling infrastructures," she says - a critical question which will determine the ability of VANs to compete more effectively on the pricing of their services. "It has been implied in Parliament that VANs can do certain things, but it remains to be seen if self-provisioning is one of them," she explains.
Global sourcing of technology projects - notably in the call centre environment, deals which demand both a telecommunications and IT component - will play an increasingly important role in attracting foreign direct investment to South Africa.
Pointing to the introduction of new MPLS network access points in South Africa through a R100-million investment earlier in 2005, she says local businesses now have access to global quality of service connectivity. MPLS, or multiprotocol label switching networks, enable the effective management of traffic across the entire network, "Necessary, to guarantee the performance of certain applications of traffic types - such as voice," explains Van der Walt-Korsten.
"We will be looking for returns on the investment in MPLS connectivity and, in conjunction with the other services that we offer the market, we believe we deliver a compelling value proposition. We are a global company that is locally relevant; with significant investments in the BEE space, the coming year sees T-Systems well positioned for growth in a competitive market," she concludes.
For more information see www.t-systems.com
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