There are technology business leaders who lament SA's telecommunications legacy, but Derek Wilcocks isn't one of them. “I am not as negative as many other people about the evolution of the telecommunications market in South Africa,” he says.
Wilcocks describes himself as an amateur philosopher, and if his personal philosophical perspective was declared, it would undoubtedly be influenced by positivity - the CEO of Dimension Data's Internet Solutions is decidedly glass half full. “After all, it has allowed the company I work for, Internet Solutions, to grow and flourish. The market certainly has its shortcomings, but so do many of the other markets in which we operate.”
Wilcocks says certain companies were allowed dominant market positions in various phases of the telecommunications market in South Africa. Prior to 2005, Telkom was dominant, but now the big two mobile operators (MTN and Vodacom) also enjoy this positional strength. “South Africa has historically been indecisive about the way it should address this problem,” says Wilcocks, talking about telecommunication monopolies and dominance. “Some interest groups feel that the incumbents should be more tightly regulated and controlled, while others feel that more competition would address the problem. My view is that both approaches are required.”
The best solution, according to Wilcocks, is a more holistic approach to regulatory and competition policy, and the quicker implementation of policies so that this accords with the fast-moving telecommunications environment. “Our regulatory framework often seems to be several years behind the market,” he says.
Telecommunications is, of course, essential to the sustainable economic growth of South Africa, which according to the 'New Growth Path', is dependent on industrialisation and a growing services sector. Wilcocks says the sector itself has reduced jobs available to lower skilled workers over the past 10 years, but that there has been an enormous surge in demand for higher skilled workers. “What is far more difficult to assess is the creation of jobs in other sectors that are enabled by the telecommunications industry.” ITWeb caught up with Wilcocks to find out how he'd change the industry if he had this power, how SA's telecoms infrastructure compares with the rest of the world, what he believes and what the one thing is that he just can't live without.
ITWeb: If you were elected the minister of telecommunications, what are the first things you would do?
Derek Wilcocks: Firstly, I would build a team of advisors from diverse backgrounds, including industry, telecommunications policy bodies both locally and internationally, and individuals who are skilled at managing telecommunications policy within a broader political system. Secondly, I would form different working groups to look at the issues facing the fixed-line industry, the mobile industry, the converged media industry, the converged enterprise ICT industry, underserviced rural areas and the Internet industry in South Africa. Each of these has unique market factors, and in my view, they tend to be grouped under one broad banner, which is inappropriate to such a diverse and dynamic market. Of course there would have to be co-ordination across each of these working groups as there is overlap. Thirdly, I would look at how effective we are at implementing and enforcing policy. This would include a review of the skills, speed of execution, and performance management systems in place at the various departments and bodies responsible for this area. I have to say that by and large I think this is what the current minister is doing, with the possible exception of focusing in-depth on more specific sub-sectors, as set out above.
ITWeb: How can telecommunications change a country?
DW: Within Africa, the two countries which come to mind where telecommunications has changed the economic growth of the country significantly are Morocco and Kenya. After the arrival of the Mediterranean cable systems more than a decade ago, Morocco built a niche business process outsourcing industry to serve European countries. Of course, they had other advantages as regards language and proximity, but telecommunications unlocked these advantages and created an entirely new industry in Morocco, employing hundreds of thousands of people. More recently, the arrival of international cable systems and a deregulated national market, offering some of the most competitive national connectivity anywhere in Africa, has resulted in an influx of foreign direct investment in Kenya in sectors as diverse as telecommunications (India's Bharti Airtel has entered the market), banking (Barclays and many other banks have established Kenya as a base for the entire East Africa), and agriculture (Kenya has grown its world share of international coffee and tea markets, partially as a result of boutique operators marketing via the Internet).
“The most pressing opportunities for South Africa include ensuring a free and competitive mobile ecosystem.”
Derek Wilcocks, CEO, Internet Solutions
Many global firms have business models that require telecommunications of a global standard and price. In Africa, if we want these firms to invest in our countries, we must accept that they will not adapt their business models to our countries beyond some very superficial changes. We will have to provide them with the infrastructure they can obtain from nations in Asia, South America, Eastern Europe and many other parts of the developing world.
Of course, we must set conditions about local job creation and other investment requirements, if we are not to experience the negative effects of economic colonisation, but by and large my view is that we must continue to encourage foreign direct investment by multinationals. Once this decision is made, we must do our best to create an environment where our local large firms expanding globally want to keep their head offices and data processing centres in South Africa. Unfortunately, several of them have already decided to move these elsewhere in the world, as a result of ICT skills shortage and telecommunications capacity and costs.
ITWeb: When it comes to telecommunications, how does SA compare with the rest of the world?
DW: Compared to most of sub-Saharan Africa, SA is still well ahead. However, a few countries, including Kenya, have now overtaken us, and others such as Rwanda are growing their usage of telecommunications at a rate that will cause them to surpass us in the next couple of years. In some countries such as Nigeria, growth of the entire sector is driven by mobile telephony, but they lag far behind South Africa in the broader use of ICT.
One of the biggest challenges for Africa is to avoid relying purely on mobile operators and to ensure a more balanced approach to growing mobile, fixed broadband and the general ability to apply and use IT. The BRIC countries all have excellent connectivity in major centres, and although I am not an expert in this area, to me they seem ahead of South Africa in regions such as Mumbai and Shanghai. However, I know from my parent company Dimension Data's work in India, where they provide managed services to the largest banking network, that rural connectivity in many developing markets remains a huge challenge.
It is not fair to compare SA to many OECD countries, as these countries have very different socio-economic circumstances to ours. However, it is concerning to note the rate at which we are falling behind the development and deployment of broadband and other technologies in countries such as the Scandinavian countries, the Benelux countries, South Korea, Japan and many others. The digital divide is a real and growing concern for many developing countries.
ITWeb: What opportunities do we have?
DW: To me, the most pressing opportunities for South Africa are ensuring a free and competitive mobile ecosystem (not necessarily more networks, but prevent the networks from bullying everyone else in the value chain), ensuring broadband last mile access is competitive, driving a regional broadband initiative throughout southern and eastern Africa, ensuring information and job intensive industries can benefit from ICT, and finally, modernising and streamlining government ICT, particularly for smaller departments and municipalities to take advantage of ICT.
ITWeb: Which technology leaders do you admire and why?
DW: I admire Bill Gates for using the fortune he made in technology to help the poorest people on the planet today.
I admire Eric Schmidt for the time he spent at Google, where he managed to balance growing a giant company with maintaining a culture of innovation and giving back. I also admire Google (so far) for sticking to open architectures rather than trying to create client lock-in through closed approaches. I think a profound philosophical battle is under way between the success of the closed Apple-type ecosystem and the open Google-type ecosystem. It will be very interesting to see who wins, but my heart is definitely with the open approach.
I admire IS founders David Frankel and Ronnie Apteker, for each continuing to pursue their passions wholeheartedly despite making money at an early age.
I also admire Jeremy Ord, Brett Dawson, Doc Watson, Steve Joubert and some of the other leaders in Dimension Data for building one of a handful of truly global technology-based companies founded in South Africa. The others are Datatec (Jens Montanana) and Naspers (Koos Bekker). I also admire my colleagues at Dimension Data and Internet Solutions, including Andile Ngcaba, Allan Cawood, Jason Goodall, Sean Joubert, Saki Missaikos, Tony Walt, Michael Oldham, Hillel Shrock, Prenesh Padayachee and the Koutakis brothers. Each one of them has taught me so much.
ITWeb: What's your mantra?
DW: Keep learning, help others.
ITWeb: Why do you do what you do?
DW: I love the people I work with and the challenge of a dynamic company and industry.
ITWeb: What's the best advice anyone ever gave you?
DW: Be true to yourself (my mother).
ITWeb: What gadget can't you live without?
DW: My automatic espresso machine.
Share