Mark Baptiste, director of service provider business at Cisco Systems SA, constantly analyses the turbulent SA telecommunications market to identify key areas of opportunity. He strongly believes that a healthy SNO will be the catalyst for explosive growth in the sector, and recognizes that limited broadband adoption remains the missing building block needed for the vision of the Next-Generation Network (NGN) to be realized.

?The announcement made by the minister in February of this year came as something of a surprise for the industry, but was immediately very positive for the outlook of the market. However, the lack of detail was somewhat disappointing, and the full impact of deregulation has not been realized as a result. I still believe the SNO opening up shop is fundamental to the transformation of the sector, as only true competition will drive value creation and lower prices,? says Baptiste.

Without widespread broadband connectivity, the Cisco NGN vision does not exist. Although the converged network architecture currently being deployed is the first step down the road to this model, the next evolutionary stage is the convergence of services, and the final stage the convergence of applications themselves. For any of these phases to be viable, broadband needs to be more freely available.

?It will be very interesting to see what the SNO broadband offering will look like, unfortunately there is no clarity on this, so we will just have to wait and see when it arrives. Whatever the form, the SNO is a crucial element in accelerating the roll-out and adoption of broadband in SA beyond its current state.?

?Ultimately everyone is looking for new revenue streams across the globe right now. The networked home is just one such opportunity, representing a whole new paradigm of services available over IP to the broadband-enabled digital home. We have already seen how this evolution of services has driven broadband penetration in Europe, and can expect to see similar growth in this new market locally once the connectivity issue is resolved. Then we will see far more than 60,000 ADSL ports deployed in the country, in fact we could double this number in one quarter,? he explains.

Focus area

Convergence has already hit the mobile sector, and, just a few weeks ago, Nokia introduced its first GSM handset with integrated Cisco Wi-Fi capability. Baptiste sees the development of converged services as the next focus area needed to drive value-creation in the sector, like centralizing data centers through Wide Area Filesystem (WAFS) to further drive down capital expenditure on servers and maintenance skills.

?Focusing on the telco market, at this point in SA the true value of deregulation should come down to lower costs. Due to the current lack of competition, we are not seeing this benefit, as the services are still regulated -- that is no-one can come in and undercut Telkom prices for the international half-circuit, which currently equate to five times those of the global providers offering the other half of this loop.?

He continues: ?There is certainly no shortage of international capacity available to South Africans. The bandwidth that is there is controlled as a function of cost, which artificially keeps the price inflated, but as soon as competition enters the market these restrictions will go away.?

Although we still await the final shape of this competition, the sector is already rapidly morphing into a force unto its own. And, with the arrival of a competitive arena, will come next-generation services, and new networking paradigms for SA consumers to find value in depending on their needs, as well as telecommunications tariffs more in line with international standards, and a global delivery platform for the abundance of new applications.

Concludes Baptiste: ?Years ago now, Cisco Systems spoke about the two great advantages of modern life -- these being education, and the Internet. The two go hand in hand, and can be utilized to astonishing affect on this continent.?