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Telkom looks offshore for data centre

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As Telkom announced declining revenues in the traditional areas of its business, data revenues bucked the trend with a 10,9% increase to R8,3-billion. And the group hopes to maximise these revenues with the acquisition of an off-shore data centre. 

Data connectivity revenue increased 4,5% to R4,5-billion, while mobile leased line revenue increased 11,1% to R1,8-billion and Internet access revenues increased 29,1% to R1,2-billion. Managed network services revenue increased 36,2% to R728,5-million, while VPN services revenue increased 46,6% to R500-million.
We have increased VPN sites by 58% to 12 741," says Telkom CEO Reuben September. "Our VPN Lite products which is delivered over the ADSL network include advanced self-help and online charging solutions. This product was launched during November 2007.
"Telkom is in the process of building on a culture of research and innovation and fast time to market in order to cater for customers who are increasingly looking for innovative, easy to use products."
Telkom has previously stated its intention to grow revenue by moving further into the converged service offering environment with a specific focus on value added data services. However, because it is difficult to make data centre acquisitions in South Africa, the group is looking to buy one outside the country.
"The data centre business is used effectively by telecommunication companies to stimulate the use of bandwidth over their networks," says September. "In addition, the convergence of IT and telecommunications are driving customer demand for one-stop solutions for their telecommunication and IT infrastructure requirements.
"Data centres are believed to be the next logical step in the value chain for a telecommunication company that is already well positioned with basic data services as well as managed WAN/VPN services and LAN services."
He says the data centre business is one of the fastest growing areas in the IT space as a result of:
* Customers realising that it is very expensive to host IT infrastructure on site – prime office space is used in many cases;
* Regulators insisting that data is protected properly and assisting with carbon footprint reduction;
* Improvement of efficiencies by moving from basic machine hosting to shared resources in the data centre;
* Being in a position to up sell into value added IT services such as Software as a Service (SaaS); and
* Leveraging the fit that exists between communication infrastructure and data centre services.