The first priority for the second national operator (SNO) is to put its house in order, says newly appointed MD Ajay Pandey.
Pandey spoke to ITWeb during the Calling the Cape conference held in Cape Town yesterday, five days after the announcement that he would head the future competitor to Telkom.
Comments from the audience and participants during the conference indicated the SNO would face a challenge, particularly from Telkom, the incumbent telecommunications operator, and from other sources such as second tier telecommunications networks.
"We are ready to face whatever challenges lie ahead, and we are working hard to set up our business," he says.
Pandey (44) comes from Bombay, has a degree in mechanical engineering and an MBA from the London School of Economics. He has been with the Tata Group for more than 10 years and has been its point man in getting start-up companies, including telecoms ventures, off the ground.
"I have been fortunate in being able to help create a number of businesses for the Tata Group and the SNO is another venture where we can make a difference."
Pandey believes telecommunications can boost economic development, while the liberalisation of the sector helps encourage connectivity and thus encourages businesses.
"Since we liberalised the telecoms sector in India 10 years ago, our fixed-line penetration per 100 people has risen from 1.2 (people with access out of every 100) to a ratio of 10.7 out of every 100," he says.
While most of SA is already well covered by cellular networks, fixed-line penetration covers only 11% of the total population and Pandey says he sees the SNO making a real difference here.
Investment needs
Investment in the SNO is expected to be in the region of about R8 billion over the next five years, with Tata putting in about $250 million (R1.5 billion). The group's stake, through its 51% holding of SepCo, which has a 51% stake in the SNO, means Tata has an effective 26% direct stake in the SNO.
"We don't aim to create an Indian company in SA. We may have to employ people from India, but we definitely aim to harvest local talent first," Pandey says.
Local interaction
Interacting with the already established local industry is part of the SNO strategy of rolling out services as they are needed and as the products are developed, he says.
"Partnerships with local companies will be established if and when the need arises. We don't see the SNO as being a dictatorial entity, rather we will develop a culture of clients and service."
Pandey would not comment on future sales strategies, but says he has had a positive reception from a number of corporations.
"Pricing will be very important, along with service levels."
According to Pandey, competition at the level of basic infrastructure is the essential precondition of lower prices, and the SNO intends to compete with Telkom on an equal footing thanks to a large and viable infrastructure investment plan. Its stated intent is "to be the preferred provider of leading-edge services in the South African market".
He says the SNO's greatest challenge will be to manage the high customer expectations.
Pandey says the SNO should introduce its first services by the end of the first half of this year and "work is in progress to give the SNO a proper corporate identity".
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