BT invests in infrastructure in SA

British Telecoms (BT) today announced it will be the first global operator with its own network infrastructure in SA.

The company says it is increasing its investment in people, infrastructure, network and services to help customers expand in Turkey, the Middle East and Africa. Its aim is to double its business across these regions. “These initiatives build on similar programmes in Asia Pacific and Latin America, where orders in the first nine months of this financial year were up over 50%,” says the company.

According to BT's research, the addressable market in Turkey, the Middle East and Africa was worth a combined £5.4 billion in 2011. IT spending growth across the regions is expected to top 10% in 2012.

As part of the programme, BT will hire around 170 employees across the three regions, including skilled professional services specialists to provide local support to customers and deliver consulting, integration and managed services. Customers in the regions will also be able to access “intelligent” network services provided by the BT Connect portfolio.

“Sub-Saharan Africa remains largely a new frontier for ambitious businesses and is currently showing strong growth rates in a number of countries. We are extending our network capabilities in that region beyond our strong South African operation. We are also seeing the emergence of a new generation of local companies in these regions, eager to expand globally,” says BT Global Services CEO Jeff Kelly.

Network reach and access options are being improved in Sub-Saharan Africa. These include the international routing facility in SA and a new network connection between Cape Town and Johannesburg.

“These will make BT the first global operator with its own network infrastructure in the country. Specific interconnection agreements with local partners extend BT's network reach into Sub-Saharan Africa.”

Richard Hurst, Ovum's emerging markets analyst, says the impact of this investment is going to be on two levels. The first is wholesale and then on existing corporate customers.

“It will have an effect on Telkom's wholesale and corporate customers. The wholesale part might bring some pressure to the broadband prices that are already dropping. There is nothing stopping companies like Internet Solutions from procuring bandwidth from them now.

“The question is whether corporates and customers will see the benefits. Probably not. But it's another straw on the camel's back.”

Hurst adds that BT's announcement will add to the major shift of telecoms and broadband prices in SA.

However, it will benefit the same bunch of people, according to the analyst. He questions what is being done to reach other people, those that have not had access before.