In previous eras, fortunes have been made in Africa through gold, diamonds and oil. Today, the smart money is on telecommunications, as Alan Swaby learns in discussion with BT South Africa.
It’s not surprising that one multinational executive in charge of IT told his contact at BT that he would simply like to hand over the keys to his IT shop and let someone else run it. Maybe such an admission is rare; but it’s unlikely to be the first time those sentiments have been expressed. The whole subject is getting just too complicated for mere mortals to comprehend!
If you share those feelings when viewed from a European perspective, imagine what it must seem like when your area of responsibility is Africa: 53 different countries with telecoms systems born out of differing colonial pasts, with differing levels of development—not to mention standards of reliability.
Faced with this kind of technical challenge, how do the global giants of this world pull all their network offices together in order to run their business efficiently? One way is to hand the keys over to BT. From its sub-Saharan headquarters in Johannesburg, BT South Africa has been helping multinational and regionally operating groups make sense of their communications since 1992.
“Our presence here,” says regional general manager Keith Matthews, “stemmed from our interests as a wholesale supplier of voice minutes, utilising investments in subsea cables connecting regional telcos. But the business you see today is a result of how BT evolved when all the multinational clients were consolidated into BT Global Services.”
Since privatising the market in South Africa, the once monopolistic supplier of fixed telephone services still remains dominant but faces a threat from over 400 licence holders who, to some degree or other, provide competition. BT has no intention of playing in that particular scrum: instead, it focuses its attention on a relatively small number of South African companies with global or at least some regional aspirations and provides them with networked IT services. Whether clients want voice or data, or work on digital or analogue networks, BT uses its registered entities in 32 of the 53 African countries to cross literal and technological borders in the quest to help customers get the most out of their information and communications technology.
Seven years ago, the workforce amounted to just 10 people; today, there are 120 communications professionals designing and managing customised networks for more than 300 blue-chip customers in the region, including such giants as Anglo American, Unilever, Thomson Reuters and Sasol.
The question is often asked how BT offers value when it doesn’t own the networks on which it works. The reason is the £789 million invested by the group in R&D. “There are countless technology companies,” says Matthews, “but they tend to focus on the far horizon. BT, on the other hand, offers systems that work now. We sell to clients the same equipment and systems we use ourselves.”
The telecommunications business is not for the faint hearted; but as the original privatised utility company, BT has long passed through the phase many of its competitors and clients are currently facing. It has the experience and the systems that stand it in good stead compared with emerging rival companies.
In order to satisfy specific needs, many enterprises want access to a wide range of outsourcing options but research has shown that they often find managing multiple vendors to be problematic. On the other hand, a single supplier offers convenience and straightforward governance. Consequently, BT has put considerable effort into combining the multiplicity of services needed to run networks and offers itself as a single source supplier, handling everything from hardware acquisition to managing and maintaining the constituent parts of the network and peripheral services.
The other side of BT’s business consists of providing expertise to national operators to improve their retail and domestic market offerings to their respective citizens. For a quarter of a century, BT has helped develop the African telecoms market with around 90 per cent of operators conducting their business through BT. In 2008 some 561 million minutes of voice traffic in Africa were carried using BT’s infrastructure.
It is forecast that by 2012, from a total population of 922 million, the total number of mobile and fixed line subscribers in Africa will reach 443 million—90 per cent of which will be mobiles. It’s also estimated that the infrastructure market will be worth US$106 billion by that time. Currently, enormous effort is going into laying new subsea cables linking the African continent to both East and West.
Some fear that this development will lead to a glut of bandwidth in Africa; but BT sees it as a chance to open new doors. “For example,” says Matthews, “BT’s Global Media Network is specifically designed to handle digital images in real time. It means a film can be shot in Africa and edited almost simultaneously in Hollywood. Already South Africa has a growing film industry and this could be replicated anywhere.”
BT knows that where good communications go, so too will the multinationals follow. With the limited number of global ICT providers, it will be organic growth rather than acquisition that enables BT to continue growing. As such, the ability to introduce and extend services such as the Global Voice Platform is key for future performance.
Closer to headquarters, the future is also looking bright. It’s been estimated that while IT growth in the rest of the world will be around four per cent, the figure in South Africa could be 11 per cent. As such, BT is ideally placed to capitalise on this potential; but to operate effectively in South Africa, it’s necessary to meet the government’s Broad-Based Black Economic Empowerment (BBBEE) goals. In Sekunjalo Investments, BT has a local partner generally considered to be among the most successful and progressive of all black owned groups. Through the 30 per cent holding Sekunjalo has in BT’s South African business, BT plays its part in broadening wealth creation opportunities among the black population.
