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THE annual Gartner Symposium in Cape Town took place in early August, with this year's event entitled Planning for Uncertainty.
At the event, telecommunications analyst Will Hahn outlined his theory that South Africa represents a "unique telecommunications opportunity".
Hahn said a combination of factors makes the local telecoms industry unlike anything else in the world. These include the fact that SA has a high cellphone penetration and sophisticated users in the space. Customers also represent a diverse blend of languages, cultures and populations.
He combined this with a dearth in terrestrial bandwidth supply and a looming broadband war, as well as a "regulatory vacuum" with the Independent Communications Authority (Icasa) facing a long to-do list.
"As telecom markets around the world become more interconnected, the attention of market participants is drawn to opportunities in emerging markets," said Hahn.
"Two questions are uppermost in their minds - how will these markets develop, and what sort of telecom regimes will they have? The answers will differ in interesting respects for nearly every country, but the situation evolving in South Africa is certainly one that merits the interest of organisations in other emerging markets, and of global firms planning to enter new markets," he explained.
"South Africa's communications network is already marked by infrastructure built by several types of organisation, including mobile carriers and government agencies."
"As such, the regulatory authorities' decision to allow former value-added network services (VANS) new entrants to build networks, in addition to offering services, is a difference of degree, not kind," he said.
Analysing the status quo of the market and expectations for the coming months, Hahn makes several predictions.
"Significant growth in new fibre networks is under way in South Africa and will continue through 2010. This expansion and the process behind it will bring new competition," he said.
"South Africa's long-haul international sector will see very substantial growth in the next two to three years.
"This will be driven by several new projects that are either under way or in an advanced stage of planning, as well as by a widening of ownership under open-access principles for the first time," said Hahn.
Wait and compare
He offered the following advice for players in the space: "Balance the urgent need to cut costs now with the transformation imperative already under way. You are already 'in for a penny' on projects that affect customer experience - prepare for the competitive scenario on the other side by including your longer-term spend in the strategic plan."
"Vendors and other carrier partners must recognise that business fundamentals in their target market remain sound at this time, but caution is the prevailing atmosphere over spending this year and next. Make your case around immediate cost savings, organic improvements in customer experience, and hastening the transformation of the network and service portfolio that carriers urgently need to succeed," he said.
"For emerging market players the downturn will only increase pressure on vendors to invest in countries with high growth. The case for carrier investment is less certain, but they too will be seeking revenue streams with sustainable margins," Hahn said.
He said enterprise and consumer carrier customers must be aware that carriers are evolving more precise pricing plans, which they should be ready to examine as options that could be mutually beneficial.
- Fin24.com
