South African companies are starting to shift their thinking about telecommunications from the traditional market offerings to a more business- and service-orientated offering, but there's still huge potential for a change in mindset.
South Africa’s telecommunications landscape has gone through a period of change in the past few years with the changes in regulatory and licensing issues in order to introduce true completion. The licensing of Neotel and the subsequent launch of its enterprise offering towards the end of 2007 has resulted in a paradigm shift in the telecommunications landscape, but there is still a long road ahead.
Stefano Mattiello, executive head of the Enterprise Group at Neotel, believes that the telecommunications landscape is beginning to shift – gone are the days of a “one size fits all” telecommunications solution – now organisations have the opportunity to get a solution that is tailored to meet their unique requirements.
“We are literally revolutionising the telecommunications space by consulting with our clients, determining their business requirements and then developing a customised solution for each one,” he says.”The view of telecommunications spend in organisations is moving away from being yet another expenditure in the balance sheet to being viewed as a vital business enabler."
Brian Neilson, research director at BMI-Techknowledge, believes that Neotel’s impact on the market is yet to reach its full potential.
“Pricing is probably the highest item on the market’s priority list and while we’ve seen that Neotel is able to provide very favourable pricing as is the case with the SITA Next Generation Network, those lower prices have not filtered through the entire value chain just yet,” he says.
SITA recently went live on Neotel’s Next Generation Network, with the Minister of the Department of Public Service & Administration, Geraldine Fraser-Moleketi, quoted as stating the cost was 8.5 times cheaper than the closest competing bid.
“We’ve seen a very different approach from Neotel when it comes to their pricing structure, whereas the incumbent has to date been fairly rigid unless it was a very big corporate client,” says Neilson. “Neotel seems to be taking an approach where they are customising their solutions for enterprise clients and in line with that customising the related pricing.”
Neilson believes that disruptive threads in the market have the opportunity of shaping the future of telecommunications.
“With their PSTN licence for example, clients no longer need two suppliers to the value that they want and expect,” he says. “It’s really nothing groundbreaking – it merely takes into account what the customer wants and then provides that to them.”
According to Neilson, where Neotel is gaining ground is the fact that it is rolling out its own network.
“For true competition, the alternative provider must own their own network,” he says.
Only then will the they become completely independent of the incumbent. “With this we will see the advent of true competition, providing users with the freedom of choice they’ve been calling for and ultimately changes in pricing."