Murray Steyn, Executive Head: Wholesale, Internet Solutions
Debate around mutually-beneficial relationships among competitors in the private sector has been going on for at least three decades.
For example, as far back as 1989 the Harvard Business Review cautioned that ‘collaboration with bigger players becomes a low-cost route for new entrants to gain technology and market access’ but agreed that the argument for collaboration is ‘stronger than ever’.
Let’s move on. In 2017 we should be figuring out how to make more collaboration work, more often.
After all, our local ICT industry provides an excellent case for collaboration, enabling new Internet service providers (ISPs) to offer services to a population that is geographically and economically wide-spread.
Since 2009, the Independent Communications Authority of South Africa (Icasa) has awarded electronic communications network services (ECNS) licences to over 300 companies.
This major step means that for the first time these companies, which included many smaller operators, would be able to build and operate their own telecommunications networks. It liberated the industry beyond a handful of big mobile networks and the national landline operator.
Since then, some new licensees have invested in their own infrastructure, but most of the smaller operators have opted to partner with existing network operators to bring innovative services to the market faster.
In the main commercial centres, consumers have a choice of providers that compete on service, price and value-adds, which ultimately serves the consumer. In outlying areas, customers can access high quality internet services faster, because local providers are leveraging the infrastructure owned by larger competitors.
This benefits individuals personally, but also professionally by enabling companies large and small outside of our major cities to compete nationally, and even internationally.
While ISPs are contributing to job creation and economic development in other sectors, growth within the industry makes this an attractive career prospect – the more citizens interested in entering the ICT and other technology-driven industries, the better for South Africa.
And what about the ISPs that have, over decades, invested in the infrastructure and licences on which new competitors grow their market share?
Collaboration is not just about helping the small guys - there is a lot of money to be made in a wholesale product offering by large network operators. Underutilised capacity can be allocated for more efficient use of resources and higher profitability.
More importantly, the service and management value-adds offered by competing, often smaller and sometimes more nimble ISPs keep larger entities on their toes.
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