Small step towards ICT convergence

LISTENING TO THE CEOs of both Absa and Telkom speaking last week at the signing of a deal between the companies, you’d have thought Telkom had snatched the deal from under the noses of its competitors. The truth is somewhat different. The deal – worth R1,7bn over five years – will see Telkom provide wide area networking (WAN) services to link Absa’s various parts together countrywide using its next generation network.

Absa’s chief administration officer Ian Russell says while it looked at proposals from other operators, none were able to provide what the bank needed now. "We don’t need this in five years’ time. We need it now and that’s why we went with Telkom," Russell replied when asked why the bank hadn’t gone with Neotel, adding: "We don’t want to be leading edge. We want to be a leading follower."

Absa head of technology sourcing Thabo Ndlela says the reason for signing the current deal was that the amount of data that the bank was transferring from its branches to its data centres, as well as from its automated teller machines, was threatening to overwhelm its existing network, parts of which are more than 10 years old. "We need to transfer 1,1Gbps from our branches into the data centre and 100Mbps from our ATMs and that’s only going to increase," says Ndlela.

While the deal restricts Telkom’s role to supplying and managing the network, CEO Ruben September was confident it would be able to move up the value chain due to the deal, providing higher value services to the public corporation as well as supporting it in its African endeavours.

September also trumpeted the deal as a significant step on the road to Telkom becoming a converged ICT provider. But Ndlela disclosed that while the network was capable of carrying voice and data, it was only going to be used to transfer data between Absa’s 2 548 branches. "At some point we’ll look at voice over IP – but that’s a separate business case," he says.

As is current common practice, the objective of the new network is to increase capacity and not reduce costs.

Telkom ABSA deal discussion



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Small step towards ICT convergence