Telkom, Seacom about to speed up business connectivity

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