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Telcos should 'review their strategies`

Cape Town, 11 Jan 2005

Telecommunications companies (telcos) should be the anchor vendors in the industrial IT services ecosystem - meaning they should pursue a bottom-up , says Gartner.

In a recently released research note, Gartner analysts say many telcos have attempted to enter the IT services market through a top-down, relationship-intensive approach, assuming they need to play the role of a consultant or systems integrator.

These comments are important in the South African context with one telecoms group, Telkom, dominating the local market. In the past, Gartner has criticised Telkom for having no technology strategy in place.

Potential competition in the form of the second national operator is also seen to be struggling to define its role and core competency ahead of 1 February, the date on which value-added services may carry voice over IP traffic.

"Trying to be Accenture [the IT consulting group] is not in keeping with most telcos` culture and core competencies. Instead, a bottom-up approach plays to the telcos` strength in infrastructure and capitalises on the burgeoning industrialisation of IT services," states the Gartner research note.

It adds that as IT services converge with telecommunications services, telcos will find major opportunities in taking on the powerful role of infrastructure aggregator. "The emergence of mass-customised offerings may be the key to their success," it says.

Gartner says the absence of a new "killer application" through to 2007 means that businesses are searching for more standardised solutions to simplify complexity, reduce costs and provide more flexibility to address rapidly changing business conditions.

"In short, the era of the IT 'craftsperson` - the consultant - is giving way to external providers that can act as IT 'factories`, churning out mass-customised solutions," says Gartner.

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