The proposed acquisition by Japan’s Nippon Telegraph and Telephone Corp (NTT) of Dimension Data will give the SA-headquartered IT group’s Internet Solutions (IS) division access to one of the world’s largest telecommunications companies.

IS MD Derek Wilcocks, reacting to the news of the proposed R24,4bn all-cash deal, says it’s “incredibly positive” for IS as it will make the Didata unit part of one of the “strongest global networks, with data centres around the world”.

Wilcocks says NTT, which is the largest telecoms company in Asia, owns or part-owns a large number of undersea cables worldwide, though none of these touches SA. It is Japan’s dominant telecoms company.

However, the company has had little presence in SA or Africa until now. “NTT has a [telecoms] node in SA, part of which is housed with us, but it’s had no real presence until now,” Wilcocks says.

Established as a Japanese government-owned telecoms monopoly in 1953, NTT was sold off to private investors in 1985 as part of a liberalisation of that country’s telecoms sector.

Wilcocks says the NTT deal, if approved by competition regulators, will introduce a telecoms operator into SA that is “much bigger than the telcos we are used to seeing in this region”.

However, Wilcocks says it’s too early to talk about what investments in networks NTT is likely to make in SA.

That won’t stop speculation that a combined NTT and IS could challenge the established players in SA telecoms more directly. A well-resourced combination could pose a threat to SA’s incumbents.

Wilcocks says more details about IS’s plans, including details of any new telecoms infrastructure investments, will become clearer after October, when the deal is expected to close. — Duncan McLeod, TechCentral