Ready for Telkom
IF NEOTEL HAS AN advantage to capitalise on – despite having entered the market years later than intended – then it must be the ability to offer a fully converged service from day one. That’s a result of having been able to leapfrog all the old technologies and build a next generation, IP-based network from scratch.
However, that gap is closing fast because Telkom is in the third year of its planned next generation capital expenditure outlay. By the end of its 2008 financial year to March it had spent R18,4bn of the planned R32bn, five-year network upgrade.
Neotel realises that Telkom must be hot on its heels in that regard. But products and solutions head Rajeev Sinha says it’s ready for Telkom should it also be able to offer a fully converged solution to the market and will remain one step ahead in terms of the flexibility it can offer clients.
Sinha says the strategic shareholder relationship with Tata has also been, and will continue to be, an advantage for Neotel, as it gets to leverage off the Indian giant’s global experience and network.
Although Tata could increase its stake in Neotel to 56% by taking out Eskom and Transnet’s 30% share, Sinha said that wouldn’t affect the product side of the business as it already benefits from the strategic relationship in terms of its offering.
When designing new products to take to market Sinha says you must look to international experience. But what’s happening worldwide may not be true for SA. Hence the importance of speaking to clients about their needs. "We try to match the technology with business requirements and come out with something that businesses need." Sinha claims companies can save 20% to 30% of their connectivity costs by being able to optimise their bandwidth to suit the needs of their particular business.
Although Neotel’s offerings may not appear to be cheap on a direct comparative basis, Sinha says it doesn’t sell products. Instead, it sells solutions. Customers must look at the total cost of ownership. He says South African operators have not traditionally been able to offer clients a fully converged service. As a consequence of being first to market, Neotel has experienced some resistance in cases where, for example, a client is still running an old analogue PBX (switchboard) machine and doesn’t want to shell out the capital expenditure for an upgrade.
Sinha says companies must look at the long-term benefits and would find that switching to IP-compatible equipment will save them money and give them greater future flexibility.
Although existing core networks are generally newer generation technologies, it’s in the access layer that problems lie, Sinha says. Clients traditionally had to buy those separately instead of as a single offering.
Telkom versus Neotel discussion
Finweek
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