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SA global business ready for take-off

By Text100
Johannesburg, 08 Jun 1999

The average South African company is spending more on IT, has more users on its networks, has e-mail as its number one data application and Internet telephony is a misnomer.

These findings have emerged from the third annual Global Communications Survey, published by Computerweek and sponsored by British Telecommunications (BT), the results of which are independent and locally generated.

Of the 157 respondents taking part in the survey, the majority were IT directors who also play a significant part in business management. They represented various business sectors, but most were from the manufacturing, retail, wholesale, banking and insurance industries. Half of the companies reported a turnover of more than R1 billion.

"What is evident from this survey is that we can see the emergence of a true global network infrastructure," said Ian Gordon-Cumming, general manager, BT Southern Africa. "South African companies are rapidly extending their tentacles into international markets and are also investing more heavily in technologies that allow them instant communication with operations and business partners around the globe."

Partly linked to this global growth is that South African corporates have almost doubled their spend on communications over the past year. Respondents` average budget for 1999 is R8.2 million - up from R4.6 million in 1998. However, the average spend on each user has decreased from R5 000/user to R3 900/user.

The number of people on networks is growing in conjunction with the increase in network speed. There are 2 117 users on a network today, compared with 914 in 1998.

As South African firms increasingly become global players, their international data communication is growing rapidly to keep up with their needs. Just over half the respondents already have international data links (69% rely on leased Diginet lines and the Internet), while another 24% plan such links soon.

The content being sent over networks is changing too. Currently 79% of international traffic over computer networks is data, but is expected to drop to 63% by 2002 as companies increasingly send multimedia, electronic transactions, voice and video traffic over global networks.

As in previous years, respondents indicated that choice is a high priority for them. According to the survey, there will be a marked shift to alternate modes of communications: the use of secure and high-quality virtual private networks is expected to increase to 36% (from the current 11%); while 27% of users said they would opt for satellite networks (increased from 10%). The largest number of respondents (40%) indicated that they plan to use cellular networks (up from the current 32%).

Even though users are demanding choice, the good news for Telkom is that rival networks will in many instances still interconnect to the PSTN once its monopoly expires. "As has happened in many overseas countries, the overall size of the market is expected to increase," commented Gordon-Cumming. "For example, in the UK an increasing number of homes have two telephone lines - one for surfing the Net and the other for telephone calls. This may become a trend in South Africa, as users increasingly telework from home. This is good news for both the user and the operator: the use of the network grows, the cost of usage drops - but the overall turnover increases."

The long and short of the survey is that network reliability, accuracy, quality, security and global reach are the most crucial network issues. "A gradual increase in the use of communication networks for better customer relationship management, collaborative applications and eventually electronic commerce is expected," concluded Gordon-Cumming.

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British Telecommunications

BT has had a presence in South Africa since 1994. Today, BT has an expanding business presence in the rest of Africa. This is part of BT`s strategy of building an international network infrastructure, human resources, partnerships and alliances to enable it to deliver communications services to multinational corporations, their extended enterprises and major national organisations anywhere in the world.

Editorial contacts

Ian Gordon-Cumming
British Telecoms
(011) 807 6760