Turning telecoms on its head
Vodacom Business plans to shake up the local telecoms space by completely reshaping the traditional telecoms business models.
The new Vodacom ISP executive director, Wally Beelders, says that he is confident that he can significantly reduce the cost of bandwidth on both the local and international portions.
Beelders is talking about price reductions up to 80% of traditional international connectivity which will basically change the current business models of traditional ISPs and network service providers such as Internet Solutions and Verizon Business.
Vodacom Business is, however, not planning to make its money from traditional access services, but rather from bundled converged solutions including hosted applications. And it is clear that the company means business when looking at their state of the art hosting facilities being developed in Midrand.
The Vodacom subsidiary is developing a fully n+n redundant hosting centre served by high speed fibre and copper network infrastructures, redundant water, diesel, power and transmission facilities.
As well as its high speed redundant network infrastructures in the hosting facilities – which make backup speeds and other management tasks much easier – everything else is also world class. Biometric access control, service facilities for clients, various on-site and off-site backup procedures and redundant power supplies which are even Eskom proof.
Vodacom has also invested in a very large storage environment, DR facilities, a virtualised hosting environment and a next generation Microsoft-hosted infrastructure platform, served by 270 high-end Sun servers, which Beelders says will provide clients with flexibility, speed and scalability and the ability for third party vendors to offer true software as a service (SaaS).
It is clear that Vodacom Business is not going to be a traditional player from which you will try to buy cheap business DSL – although the company will offer clients any access technology which they may want – but rather a converged service provider from which you will buy a full suite of IT solutions.
Considering its plans to drastically cut bandwidth costs it is not surprising given that Vodacom is building its own fibre network which will provide it with the ammunition to provide high speed access at a fraction of the current prices.
Vodacom is not alone in its quest to bring truly converged, bundled services to the market. Neotel has already said that it was positioning itself as a converged service provider and Telkom has also completed parts of its new NGN network.
Beelders is however confident that Vodacom Business’ value proposition will be unmatched in the market, and he pointed out that corporate clients are very willing to migrate to new players if their value proposition was better.
One of the biggest advantages Vodacom Business has is its ability to bundle cellular voice and data services with more traditional IT offerings. With this in mind it is not surprising that MTN is looking at buying Verizon Business at a premium to ensure that it can compete head-on with Vodacom Business.
Vodacom Business has already signed a few contracts worth millions of rands with some of the big corporate businesses in South Africa, and many more are likely to follow. Neotel has also indicated that it was signing up many new clients, indicating that there was a need for converged service solutions in the corporate market.
The new converged telecoms players such as Vodacom Business and Neotel may herald a new age in the telecoms space where bandwidth is not a prized commodity sold for high profits, but rather a mere pipe used for providing clients with a full range of IT solutions.
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