Dimension Data, the Johannesburg-headquartered IT services group owned by Japan’s Nippon Telegraph and Telephone (NTT), wants to become a much more active player in South Africa’s mobile communications industry and has been involved in talks about potential deals that will help it do this.
This is the word from Dimension Data Middle East & Africa CEO Derek Wilcocks, who tells TechCentral that he can’t comment on specific discussions because of strict nondisclosure agreements. “If there are any deals going down, we are certainly looking at whether we can be involved and how.”
Didata’s name has been linked to possible deals involving both Neotel and iBurst parent Wireless Business Solutions. Both companies have access to radio frequency spectrum that is well suited to rolling out next-generation 4G/LTE networks.
But Wilcocks emphasises that if Didata does get access to spectrum allowing it to build a national LTE network, it will work with other players to do this and look to resell capacity to the incumbent mobile network operators in order to make the project feasible.
“We are relatively small when it comes to major infrastructure investments and we’ll never have the traffic that the big mobile operators can generate,” he says. “So, we have to be very clever about how we invest in infrastructure.
“We are actively looking for joint ventures, investments, disposals or even commercial arrangements with people who currently have infrastructure and who are battling to monetise it, or people that want to invest in infrastructure,” he says. “Although we are not going to invest at the level of the big mobiles, we are a player that is now capable of putting hundreds of millions of rand into an infrastructure project.”
Didata already owns Internet Solutions, which has extensive broadband and data centre infrastructure. It is also a one-third partner in national fibre-optic infrastructure supplier FibreCo (along with Convergence Partners and Cell C) and it recently concluded a R328m deal to buy AccessKenya, Kenya’s largest Internet service provider.
Despite the interest in becoming more active in mobile infrastructure in South Africa, Wilcocks emphasises that NTT Docomo, Japan’s largest mobile operator, has no intention of launching a mobile network in this market.
“I’m quite sensitive about this point because what we would like is a far more cooperative relationship with the incumbent mobile network operators,” he says. “In the way we set this up, we don’t want to be just another network operator to take them on.”
He says Didata does not have the brand or the expertise to launch a national retail mobile network. “We are not a consumer player,” he says. “We are not looking at spectrum because we want to take on a Vodacom or MTN — we don’t think we could. But as the corporate world moves more to mobility, the ability for us to offer a combination of our outsourcing and cloud offerings with a mobile offering is significantly enhanced if we can have some level of access and control beyond just buying a retail Sim card.”
If Didata were to get sufficient 4G/LTE spectrum to build a national network, it would have no other choice but to make the spectrum available in some way to the incumbent mobile network operators, Wilcocks says. “That is the only way you can monetise that kind of spectrum. Even if you got the spectrum for free, the cost of rolling out a national LTE network would mean you would need to have consumer mobile traffic on it.”
Didata’s interest is mainly in serving the corporate market. To do this, Wilcocks says Didata needs access to the “provisioning, billing and configuration management systems within the mobile network”.
“The mobile operators feel they should do all of that and exclude us,” he says. “It would be in the best interests of our customers if we could work with the mobile operators… Given our strong consulting and systems integration capabilities, our ability to make this work for a corporate is ahead of where the mobile guys are.”
At the very least, Wilcocks believes a regime for controlling how mobile operators provide wholesale services to competitors is needed.
He says he is encouraged by the speed at which new communications minister Yunus Carrim is moving and hopes clear spectrum and broadband policies will be issued soon.
“Over the last decade, the South African market has been somewhat retarded by delays in spectrum policy and broadband policy. If we continue along the current path, unfortunately we will continue to drop behind markets like Kenya,” he says.
“It’s interesting to see how much cheaper and more widely available broadband is in Kenya. In Kenya, you’ve had more clarity earlier on.” — (c) 2013 NewsCentral Media
