Small step to­wards ICT con­ver­gence

Telkom still only op­tion for risk-averse Absa

Finweek English Edition - - Communication & Technology - BENE­DICT KELLY

LIS­TEN­ING TO THE CEOs of both Absa and Telkom speak­ing last week at the sign­ing of a deal be­tween the com­pa­nies, you’d have thought Telkom had snatched the deal from un­der the noses of its com­peti­tors. The truth is some­what dif­fer­ent. The deal – worth R1,7bn over five years – will see Telkom pro­vide wide area net­work­ing (WAN) ser­vices to link Absa’s var­i­ous parts to­gether coun­try­wide us­ing its next gen­er­a­tion net­work.

Absa’s chief ad­min­is­tra­tion of­fi­cer Ian Rus­sell says while it looked at pro­pos­als from other op­er­a­tors, none were able to pro­vide what the bank needed now. “We don’t need this in five years’ time. We need it now and that’s why we went with Telkom,” Rus­sell replied when asked why the bank hadn’t gone with Neo­tel, adding: “We don’t want to be lead­ing edge. We want to be a lead­ing fol­lower.”

Absa head of tech­nol­ogy sourc­ing Thabo Ndlela says the rea­son for sign­ing the cur­rent deal was that the amount of data that the bank was trans­fer­ring from its branches to its data cen­tres, as well as from its au­to­mated teller ma­chines, was threat­en­ing to over­whelm its ex­ist­ing net­work, parts of which are more than 10 years old. “We need to trans­fer 1,1Gbps from our branches into the data cen­tre and 100Mbps from our ATMs and that’s only go­ing to in­crease,” says Ndlela.

While the deal re­stricts Telkom’s role to sup­ply­ing and man­ag­ing the net­work, CEO Ruben Septem­ber was con­fi­dent it would be able to move up the value chain due to the deal, pro­vid­ing higher value ser­vices to the pub­lic cor­po­ra­tion as well as sup­port­ing it in its African en­deav­ours.

Septem­ber also trum­peted the deal as a sig­nif­i­cant step on the road to Telkom be­com­ing a con­verged ICT provider. But Ndlela dis­closed that while the net­work was ca­pa­ble of car­ry­ing voice and data, it was only go­ing to be used to trans­fer data be­tween Absa’s 2 548 branches. “At some point we’ll look at voice over IP – but that’s a sep­a­rate busi­ness case,” he says.

As is cur­rent com­mon prac­tice, the ob­jec­tive of the new net­work is to in­crease ca­pac­ity and not re­duce costs.

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