Corporate wars
THE ATTEMPT BY Vodacom Business to break into South Africa’s connectivity market is going to be a tough nut to crack if market leader Dimension Data subsidiary Internet Solutions has anything to do with it.
Although it didn’t address the topic of its newly launched competitor directly at recent presentations by key executives, Internet Solutions laid out its plans and prospects in its 10 business units, ranging from straight access to voice and other offerings.
It’s clear that despite losing some senior people along the way – two, Ermano Quartero and Johann Pretorius, went to Vodacom Business – Internet Solutions remains a formidable competitor.
Its key advantage is its 4 500 corporate clients. Having grown up dealing only with consumers, Vodacom will have to learn to win the hearts and minds of the corporates.
Business Solutions director Hillel Shrock says Internet Solutions had a culture of innovation and made it its business to understand the requirements of its clients, irrespective of whether those were small, medium or large enterprises. That had also meant following them up Africa, which it began doing four years ago.
Internet Solutions has an extensive network of links to corporates throughout SA, although unlike the incumbent operators, it doesn’t yet have the right to self-provide its own end-to-end network. It hopes that will change with the licensing process currently under way at communications regulator Icasa so it will be able to gain access to the much-coveted WiMax spectrum. It does have existing last mile wireless offerings based on solutions over legally available spectrum (specifically, the ISM band 5.4GHz), but has also completed WiMax trials.
Shrock says although WiMax was important to its business – as this would give it more direct access to the client – it did have contingency plans in place and was used to navigating obstacles if necessary. However, it had a good relationship with Icasa and was considered an important player.
Internet Solutions senior regulations officer Siyabonga Madyibi says it hopes Electronic Communications Network Services (ECNS) licences will be awarded by year-end. The allocation of spectrum was dependent on that process, but Madyibi says it had been lobbying hard for that to only be awarded to players who haven’t had previous access to the wireless spectrum. Although it offers a range of services, Internet Solutions grew out of the pure corporate connectivity sector and still derives 40% of its revenue from that area.
Alan Bacher, head of the Access business unit, says that market is very competitive, so it just had to make sure it was still the de facto choice for Internet users. Bacher says it’s particularly difficult to be a customer in this market. “How do you know what you’re getting?”
However, the company was moving away from the old model of providing capacity on the basis of contention ratios (which indicate how many users share the bandwidth) to a model of service level agreements, where you pay more for the best available uptime. “That should be easier for customers,” says Bacher.
But although the connectivity market is Internet Solutions’ bread and butter, the corporate voice market is a much bigger potential pie and a space it started playing in – with its voice over Internet solutions offering – three and a half years ago.
Business unit head Greg Hatfield says it’s just sticking to its knitting in that sector, trying to eat as much of Telkom’s lunch as possible. Although it would offer other value-added services it seems being able to offer a cheap voice minute was still a valuable proposition, Hatfield says.
Internet Solutions has arrangements to interconnect with Telkom, Vodacom and Cell C and is currently completing those with MTN and Vox Telecom, Hatfield says.
However, although the others will be more important down the line as the market opens up and more traffic flows through the alternate voice providers, Hatfield says the Telkom agreement was obviously the key one at this stage. Other key markets for Internet Solutions in the voice sector include the wholesale market for international inbound traffic, call centres and targeting specific communities with regard to their on Internet calls.
Hatfield also issued a challenge to the corporate least cost routing (LCR) market, saying players in that space had long had little competition and had priced their services badly.
Internet Solutions also has various other business units, ranging from mobile and broadband divisions to a relatively new e-commerce division that will enable corporates to buy and manage their own requirements directly over an online portal. In addition to hosting virtual private network divisions it also has security solutions, including a recently launched “credit card” device that provides the user with a specific access code at the push of a button.
Finweek
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