Sunday Times

Telkom, Seacom about to speed up business connectivi­ty

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AS the online landscape is transforme­d by a flood of new users, devices, services and ways of interactin­g, it is inevitable that the business of connecting people, places and things also changes radically.

Last month, within days of each other, two major suppliers of connectivi­ty to South Africa announced restructur­ing and new brands to address the changing needs of the market.

First, undersea cable operator Seacom announced it had entered the African enterprise market. It would serve businesses directly instead of only linking up to telecommun­ications operators from landing points along the coast.

It offered “best-in-class connectivi­ty and cloud services that bring business customers lightning-fast bandwidth at highly competitiv­e prices”, with fibre internet access options ranging from 25 megabits per second to 1 gigabits per second.

The new service, Seacom Business, has been tested since the start of the year, signing up about 20 large customers a month. It has appointed 20 partners as resellers, in effect acting as the wholesale source for these retail service providers.

Coincident­ally, just five days later, Telkom, which had been South Africa’s only undersea cable operator before Seacom’s arrival in 2009, also unveiled a restructur­ed wholesale operation. It launched a new brand, Openserve, to house its wholesale and networks division.

“Openserve will be a distinct business unit in the Telkom Group, formed as part of the company’s ongoing efforts to strengthen customer focus through a more flexible and agile operating model,” group CEO Sipho Maseko said. “This move is also in line with Telkom’s turnaround strategy to separate its wholesale and retail divisions to facilitate greater focus, accountabi­lity and, most importantl­y, customer-centricity.”

At the heart of the new business, however, is a recognitio­n of the changing needs of the market, which is demanding “open access”. The Organisati­on for Economic Co-operation and Developmen­t defines this as “an arrangemen­t that provides effective, wholesale access to network infrastruc­ture or services at fair and reasonable prices, and on transparen­t and nondiscrim­inatory terms”.

The definition speaks volumes about the radical change in Telkom’s corporate culture, which used to focus on control of all markets at all costs.

Symbolisin­g the open environmen­t, Seacom Business is a client of Openserve, and Telkom is a client of Seacom.

The difference is that Seacom doesn’t have the massive legacy systems of both people and infrastruc­ture that dictate Telkom’s operations. Its new Johannesbu­rg headquarte­rs, in the stylish Design Quarter in Fourways, houses 130 staff.

“By the end of next year we plan to be 165 people,” says CEO Byron Clatterbuc­k. “Our model is to enable partners and be very efficient and scalable, mirroring how we built our own network.”

As with Openserve, Seacom Business will still sell directly to key clients even as its service provider network expands.

“Last-mile” fibre — the link from network to end user — is its focus in the corporate market, says Seacom Business head Grant Parker. The strategy, however, is to create “fibre precincts” that cut the distance, and cost, of that last mile. Seacom Business has launched 20 precincts in South Africa, and plans 40 more this year.

South African business connectivi­ty is about to get dramatical­ly faster and somewhat cheaper. The challenge will be to leverage this open access to keep up with market demands that are already outpacing most businesses’ ability to keep up with their customers.

Goldstuck is the founder of World Wide Worx and editor-inchief of Gadget.co.za. Follow him on Twitter and Instagram @art2gee

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