The South African telecommunications industry has become characterised by a lack of understanding between the end-users and the suppliers of each other`s business drivers, says a Cape Town-based consultancy.
Danie Nel, CEO of Nebula, which offers telecommunications consulting, outsourcing and benchmark services, says the market is also going through a lot of positioning between the various suppliers that should last another 18 months.
"A key measure of costs for retailers is that of the square meterage they rent. They are accustomed to having fixed costs that they can measure that can be incorporated into their turnover. Telecommunications suppliers, however, want annuity income and want to sell as many minutes as possible," he says.
Nebula has been supplying its services to many of the large retail chains including Woolworths, Pick 'n Pay, Foschini and NuClicks.
Nel says another issue being raised within the market is that mobile network operators will begin putting their own lines into an end-user`s premises to create a "virtual cell" that will then route calls through their own network and eventually terminate with Telkom`s network.
"The race is on [between suppliers] to see who can get the most calls routed through their networks and pass them onto Telkom in order to make money out of the inter-connect fees."
Nel says the industry looks set to be divided into three broad categories of telecommunications suppliers, which in turn will be divided into tier groupings. For instance, Telkom and the second national operator will be tier one telecommunications companies, while a company such as Storm will be a tier two telco.
The two other categories will include Internet service providers and aggregators.
"A new animal in the local market is the aggregator. This is a company that says it will take an end-user`s telecoms contracts and manage them in order to get the best deal. Examples of aggregators would be Dimension Data and Computer Sciences Corporation," he says.
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