Can local telecommunications enable SA to become an outsourcing hub, like India?
This was the major theme of the Neotel Talking Points Executive Forum held in Bryanston yesterday.
“South Africa and India have a lot in common, but we also have many differences,” said Sandeep Mathur, president of corporate affairs for Tata Communications.
Mathur outlined similarities between SA and India, such as the large youth population. He said the youth market is growing quickly in India, and pointed to several youth-centric initiatives.
He noted that SA needs lower telecoms costs, a better educational system and more government support. Mathur explained that India had several government incentives such as a 10-year tax holiday for IT companies.
Until the early 1990s, he noted, “the telecoms sector in India was a disaster”. There were major challenges with just getting a telephone, let alone getting it to work, he added.
A combination of three factors - India's demography, government reforms and globalisation - led to great growth in India, he said.
Bandwidth track
Nick Binedell, founding director of Gordon Institute of Business Science, said a major issue holding SA back is the lack of efficiency. He said India faced similar challenges to SA, such as corruption, poverty and the emigration of the elite. “In emerging economies, the question is: are we going to get off our butts and do something?”
Binedell noted that businesses have an important role to play in any democracy because “growth is the oxygen of democracy and businesses are the drivers of growth”.
However, for a better economy, SA needs better connectivity. “Today, bandwidth is what the railroad used to be,” he added.
Angus Hay, CTO of Neotel, spoke about the next generation of broadband, and emphasised that a good telecoms infrastructure is important to SA, because a large percentage of the GDP is in the service industry. “Telecommunications is the critical enabler of the service economy.”
With the arrival of the undersea cables and the change of SA's telecoms market - due to consolidation, globalisation and regulation - “the natural direction of pricing for bandwidth is down”, he concluded.
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