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Issue Date: March 2003 (es)

Convergence QA

1 March 2003

1. From your perspective what does convergence of IT and telecommunications mean, and what are the implications for business enterprises?
Peter Davies, managing director of AT&T; South Africa [PD]
The convergence of IT and telecommunications means the delivery of new services to new and old customers. Services can now be delivered via TV screens, cellphones, laptops, palmtops, etc. There is now a wider array of services that can be provided to a wider array of people through the integration of the different technologies, including broadcasting. Because of this, many corporations are faced with ever increasing costs from their IT and networking components and need the convergence of the two to ensure they bring down the total cost of ownership (TCO) ie, the total cost of delivering IT services over networks.
Keith Boyd, CEO of Venture Communications [KB]
Essentially, there are four main information building blocks necessary for doing business today: They are voice, data networking, messaging and Internet access. The convergence of IT and telecommunications will integrate these services
Simon Blagden, International director at Spescom [SB]
The one biggest factor therefore in terms of the implications for businesses, is making sure that the correct skills are available in-house to support the integrated networks. People now expect to have one network infrastructure for all services - voice, data, video, etc, with greater power and efficiency.
Edwin Thompson, regulatory director at UUNET SA [ET]
Ultimate convergence from an IT and telecommunications perspective involves a common medium for all or most data transmission, both local and wide area. This would involve a plug on the wall which can be used for all IT and telecommunications purposes. It should not matter if you plug a phone, computer, video conference unit, printer, fax or any other relative IT device into the socket.
2. What are the implications of the changes in the telecommunications regulatory landscape on enterprise communications?
Jonathan Newman, head of strategy at Cell C. [JN]
With the introduction of additional operators into the South African telecommunications landscape we believe that the costs of data could decrease and have a significant saving for business. With the introduction of cheap PDA wireless devices, more sophisticated business applications and the inclusion of GPRS in existing licences this further reduces costs.
[SB]
With regards to the regulatory landscape, enterprises will demand the ability to push all media through their own network and that of their chosen telco. This chosen telco may be a global partner rather than a traditional local telco. Enterprises must not be impeded therefore by local regulatory demands such as restrictions on VoIP, interactive video, etc.
[ET]
There are two significant implications of the current changes:
a) The element of choice with regards basic telecommunications.
b) Current voice restrictions continue to remove the ability to have significant choice in fully-fledged converged systems. This is bound to stunt growth in the converging technology market. Telco's are rarely able to be all things to their customers, therefore these limitations need to be seriously revisited.
Franklin Pieterse, Marketing Director, Marconi SA [FP]
Those enterprises that have invested in convergent technologies will have the potential of gaining technology-based, early-adopter competitive advantages. Converged services offer potential cost savings and improved customer service, and early adoption provides enterprises with valuable experience for future development.
Andy Bull, director for Mitel Networks, South Africa [AB]
Deregulation should lead to services being more affordable, with the consumer having a better selection of services to choose from and experiencing improved service levels. However, the new entrants will need to use service innovation, rather than price, as a differentiator.
3.What emerging applications do you envisage will generate the revenues that telcos so sorely need? Or put differently, is it inevitable that the costs for telecommunications will continue to dive, opening up opportunities for new applications?
[JN]
Voice and SMS remain the killer application in the GSM space and they are likely to considerably outweigh the introduction of any new services in the next five years. We expect true data services (GPRS/GSM/MMS) to grow in usage but until things like e-mail (the killer Internet application) and video telephony become mainstream, mobile voice and SMS remain the dominant applications.
[SB]
Costs will continue to dive against a background of greater competition and deregulation. In the end, the telcos that will survive and grow will be the ones who take a different approach to their business. Telcos will start to compete in different spaces offering home computing, interactive media, e-learning, home shopping - a variety of add on services - with the aim of increasing revenues on their network. The telco's brand will increasingly be used in a consumer context.
[PD]
In SA we have some of the more expensive international communications links compared to anywhere else in the world and generally there will be a drive to bring down the cost of these. But the issue here is that this is only one component of delivering an ICT service. Content, the Internet, multimedia and the delivery of business applications are also components of an ICT service that need addressing and my feeling is that we need to put more money into security and content of the information. The fact is, bringing down the cost of the basic line is of little use if an organisation has to spend an inordinate amount of money to secure that environment. Therefore, the issue is to lower the total cost of ownership of your communications environment, with the line being one small part.
4. Are there any specific telecommunication business/technology developments you anticipate happening in 2003?
[AB]
From a South African perspective, 2003 will see an increase in the availability of broadband services, with the Telkom ADSL roll out gaining momentum and new entrants using leapfrog technologies, such as wireless and satellite, to meet customers' demands.
2003 will be the make or break year for the take up of GPRS. We are also likely to obtain visibility as to what these operators intend doing with 3G and when they intend doing it.
Heinie Witte: Business Manager: Telecommunications T-Systems South Africa [HW]
The SNO will start to gain market share, as they will come in with special deals. The Internet will be further applied for business transactions. Network security will enjoy a strong focus from businesses and fixed carrier solutions will see replacement by on demand connectivity through the application of technologies such as ISDN, XDSL, etc.
[KB]
From an African perspective, the demand for new generation wireless telecommunications infrastructures will escalate in 2003. This stems from the low density of conventional wired telecommunications networks. While it is accepted that current levels of funding and investment are inadequate to meet Africa's need for a sustained telecommunications development programme, much is being done to empower Africans to access the opportunities in this sector themselves.
[FP]
With the emergence of competition for the incumbent telco coming in the form of the SNO, it will be interesting to monitor developments in the VoIP arena. Although much-hyped, the ability to transport voice, data, images and video traffic over the same network at the same time is what convergence is all about. The cost efficiencies are highly notable, however few organisations can claim to be fully IP-enabled. Until such time and, of course, until VoIP is suitably legislated in this country this vaunted service, along with the associated bandwidth costs, should be closely watched.
Contributors:
Peter Davies, managing director of AT&T; South Africa [PD].
Keith Boyd, CEO of Venture Communications [KB].
Simon Blagden, International director at Spescom [SB].
Edwin Thompson, regulatory director at UUNET SA [ET].
Jonathan Newman, head of strategy at Cell C. [JN].
Franklin Pieterse, Marketing Director, Marconi SA [FP].
Andy Bull, director for Mitel Networks, South Africa [AB].
Heinie Witte: Business Manager: Telecommunications T-Systems South Africa [HW].


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