Microsoft effectively leveraged a monopoly in operating systems to dominate office software, messaging and a host of other areas. Derek Wilcocks, joint-MD of Internet Solutions, while admitting to admiring Microsoft for its achievements, fears the same could be true of SA`s own monopoly, Telkom. And he believes changing the monopoly into a duopoly will make very little difference.
"You are giving two organisations a licence to operate a duopoly across the entire IT market," he told the Contact Summit in Sun City yesterday, referring to Telkom and the second national operator due in May 2002.
Wilcocks bases his argument on the generally accepted premise that all information technology will be offered as a utility service in the future. It is an "inexorable trend", he said, despite the recent faltering of application service providers. "It will happen, if not in five years then in ten years."
This means that applications are migrating to the infrastructure layer, and in SA, the infrastructure layer will, for the next five or more years, be the sole domain of Telkom and its future competitor.
"This has very worrying implications for the telecommunications regulator. If you create a duopoly over the infrastructure layer you are also creating a duopoly over further layers."
He is especially worried when Telkom`s alliances with the likes of Cisco, Commerce One SA and other vendors are seen in the light of the death of data networks.
"Who is going to want only a data network three years from today? Nobody."
Wilcocks said convergence means any company wants a single network for its voice and data needs and has little interest in duplicating infrastructure. Telkom is currently the only player with the legal right to offer a fully functioning voice network, and therefore also the only provider from which to source a converged network.
"This is a very serious situation for data providers," he noted.
But it is not only Internet service providers that will be affected. He believes that a company which sources its network from Telkom would be very likely to also source applications for that network from it, as Telkom could supply software well integrated into the infrastructure. And once one application is in use it is natural that further business will also go to Telkom.
If such a possibility were not enough reason for IT companies to take cognisance of the rules that govern what Telkom can do, Wilcocks also pointed to the telecommunications regulations creep which is affecting the broad IT market. As an example, he highlighted voice over Internet protocol (VOIP) regulation, a telecommunications matter that affects Internet players by denying them certain applications.
VOIP is also a good example of why Telkom should naturally seek to manipulate the regulatory environment for its own gain and to the detriment of other players, he said, as is the case worldwide.
"I think many telcos are going through a tremendous struggle between protecting existing revenue and offering new services." As a consequence, such providers seek to prevent others from offering those new services first.
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