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Issue Date: January 2008

Unified communications in South Africa

January 2008
Letticia Nkumbula, Frost & Sullivan analyst

Unified communications (UC) provides seamless control and access across multiple devices, and this has been made possible due to the convergence of telephony, messaging and other web-based technologies. Providers have also become more sophisticated by offering solutions that suit the South African environment.

The implementation of UC is in line with next generation networks (NGN) that assemble all communication requirements around the IP network. In this kind of setup, broadband plays a critical role in facilitating effective communication. At present, the cost of broadband in South Africa is high and this has impacted on the UC environment by making it less affordable to many enterprises and individual users. This poses a key challenge that UC providers have to overcome in order to offer clients a service that meets their requirements.
The shortage of specific skills in key areas of ICT is another critical factor facing service providers. This factor is felt acutely by providers of UC, as there is a need for skilled IT and telecoms personnel to co-exist in order to meet the expected standards. The required skill sets cannot be achieved easily or cheaply. This puts local providers at a disadvantage since they have to compete with well established international companies that have the capacity to offer better remuneration to skilled personnel.
Although the UC market is still fragmented due to its high cost, present conditions are favourable for market growth. New initiatives aimed at investing in telecommunications infrastructure are being addressed by both telecoms providers and government. One such development is government's recent approval of the Broadband InfraCo Bill. The eastern and southern Africa submarine cables endorsed under NEPAD e-Africa are expected to be rolled out by 2010. These, and a positive resolution surrounding the Eassy submarine cable, are expected to address the major challenge of broadband cost which will subsequently impact on the uptake of UC in the country.
Several organisations are changing their work patterns by introducing flexible working hours and supporting employees to work from home, on the move or at the client's site. UC users could realise benefits through increased work productivity, cost optimisation and improved workforce mobility. It also provides mobile workers with a constant link to the office, thus giving them instant access to information which effectively reduces delays in decision making. Internet, voice, messaging solutions and presence information are all embedded around the same environment in order to support this emerging working culture.
UC has high market potential among large enterprises. These are also the early adopters of new technologies, since their operating environments require integration of different offices and a mobile workforce. Among corporate clients, financial enterprises are the most responsive to UC solutions. Although most enterprises in South Africa are in the SMME sector, their uptake of UC has been slow. Solutions for SMMEs introduced by vendors such as Siemens and Cisco are however expected to grow the market in this target group.
South Africa is an emerging market that had early exposure to enterprise tools such as instant messaging and e-mails. UC makes these tools more effective through improved integration. While Internet users can quickly understand the UC solution, since they have already been introduced to new communication tools, the industry will also benefit from targeting the mass consumer market among the mobile users. Mobile operators in South Africa cover a wide communications network including places where a fixed line has not been able to reach.
The UC market also stands to benefit from the 2010 FIFA World Cup, which has high communication requirements. Some companies are getting ready to roll out infrastructure in readiness of this event. Even though the event itself will be short-lived, this infrastructure will remain in place and will be useful in growing local opportunities.
Since many prospective users have invested in silo systems, the growth of unified communication in South Africa is fundamentally dependent on the ability to integrate the solution into the existing infrastructure. The low diffusion of new technologies in the country makes integration a viable solution. The portfolio approach among UC vendors helps to curtail the problems associated with system integration and present increased opportunities for the UC market growth.
Frost & Sullivan analyst, Letticia Nkumbula
Frost & Sullivan analyst, Letticia Nkumbula
For more information contact Patrick Cairns, corporate communications executive - Africa, Frost & Sullivan, +27 (0)21 680 3274, patrick.cairns@frost.com


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