2007 Lucrative for South African ICT Sector

The South African ICT sector expected 2007 to be a lucrative year, and indications are that the year is living up to some of its promise.

Major players in the ICT sector said they expected greater regulator clarity, stronger growth for the providers, more services and products for the consumers, and fierce competition and price drops, they said.

There will be lots of opportunities from the client and service provider perspective, said Internet Solutions CEO Angus McRoberts. For the first time, clients will have many options.

These developments will take place despite strong challenges which include slow deregulation and an acute skills shortage, speakers said.

Fierce competition

Competition will be fierce competition in the corporate business side, with lots of services and products launched, said Neotel MD Ajay Pandey. However, increased uptake of services will compensate for any price erosion taking place as a result of competition, with the providers enjoying strong growth, he said.

As we move ahead, the battle on competition will be on speed, not infrastructure, he adds.

MTN Network Solutions Mike Brierley also expected good growth in the Internet Service Provider (ISP) market. Mobile data will be significant player, with MTN seeing 10-15% growth per month, Brierley said.

Projected price cuts will however have limited on revenues, as corporates are expected to trade their cost savings they receive as a result of the price cuts for more bandwidth, he added.

Strange bed-fellows

Speakers predicted a lot of mergers and acquisitions, with companies consolidating their holdings in order to become more competitive and new players entering the market.

Competitors will collaborate to meet customer needs one day, and then compete hand-over-first for business the day, said Microsoft SA CEO Mfungwa Serima.

Serima cited the partnership between Microsoft and Novel as an example of some of the strategic partnerships that may be formed. There will also be a lot of sharing of infrastructure and facilities, Pandey added.

Regulatory clarity

DataPro executive chairman Tony Marken however said the Independent Communications Authority of South Africa (ICASA) has yet to finalise the interconnection and facilities leasing policies. He said his company signed an interconnection agreement with Telkom, but could not put the agreement into action it until ICASA provided clarity on the matter.

Pandey said regulatory clarity will emerge in the coming year. Rules will be defined, big strides will be taken, leading to pricing control, among other things, he said.

Brieley and Marken however disagree, saying regulatory measures that will liberalise SAs ICT market need to be fast-tracked. Even though the process is taking place, ICASA has not been bold enough, Brierley said.

Marken said SA needs a regime similar to the US, where the Federal Communication Commission which set the deregulation agenda, set firm deadlines and enforced them.

Every month of delay is millions of rands lost, he said.

Damaria Senne is a journalist and author based in Johannesburg, South Africa. She writes about the telecommunications industry in South Africa and Africa, including cellular, mobile and wireless technologies and messaging news and trends.

Read her business related articles at http://www.itweb.co.za She blogs about parenting/writing at http://damariasenne.blogspot.com

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