Dimension Data\u2019s Internet Solutions (IS) is set to up the ante in SA telecommunications by pumping hundreds of millions of rand into new fibre infrastructure as it steps up the fight with Telkom, Vodacom and MTN<\/p>\n
IS, the country\u2019s largest corporate- focused supplier of Internet services, is investing a fortune in:<\/p>\n
Building fibre-optic lines to its 220 largest customers, thereby reducing its reliance on Telkom;<\/p>\n
Investing in the West African Cable System (Wacs), a new, high-capacity submarine telecom cable that will link SA with Europe;<\/p>\n
Constructing two new data centres, one in Johannesburg, the other in Cape Town, to cater for anticipated demand as broadband prices fall.<\/p>\n
Data centres are secure, airconditioned facilities crammed full of servers that host online services and websites on behalf of clients. Many companies are choosing to outsource management of these services to data centre providers, which are better able to guarantee system up-time.<\/p>\n
IS\u2019s new investments will allow it to compete more aggressively with the incumbent network operators. IS, which was previously only entitled to provide services on other providers\u2019 infrastructure, can now build its own network.<\/p>\n
IS CEO Angus MacRobert is keen to take advantage of this to reduce the company\u2019s reliance on Telkom. But it is also on a collision course with mobile operators MTN and Vodacom, both of which want to corner the data centre market. MTN recently acquired Verizon Business in a deal believed to be worth about R1,4bn; and Vodacom has launched Vodacom Business as a greenfield project.<\/p>\n
Neotel is also investing more than R100m in two data centres. And Telkom, which has lagged in data centre services, has identified it as a critical growth area: it has restructured into three new divisions, one of which is data centre operations. Telkom has indicated it is keen to make an acquisition in the space.<\/p>\n
MacRobert says there has been little let-up in demand for data centre services, despite the tough economy. \u201cWe sold more data centre capacity last year than in the previous 10 years combined,\u201d he says. Growth has continued strongly into 2009, he adds. Though most of this can be attributed to a trend by companies to outsource, MacRobert says Eskom\u2019s supply problems have also helped IS.<\/p>\n
He is reluctant to reveal precisely how much IS is investing in new infrastructure, saying this information will be released with Didata\u2019s interim results, expected in May.<\/p>\n
MacRobert concedes that despite the big investments being made by IS, the company will remain heavily dependent on Telkom.<\/p>\n
He says relations between IS and Telkom have improved \u2014 previously, the two had a fractious relationship, with IS frequently accusing the fixed-line operator of abusing its dominant position.<\/p>\n
\u201cTelkom has understood the need to have a clearly defined wholesale strategy,\u201d he says.<\/p>\n