EQUANT SAYS OPTIMISM ON SNO PRICES 'WAS NAIVE' IN SOUTH AFRICA
France Telecom-owned Equant is disappointed that the arrival of the second network operator (SNO) seems unlikely to do much to cut the cost of national voice and data traffic. Equant carries international traffic for many companies in SA, but regulations force it to carry any national traffic on lines that it leases from Telkom.
Derrick Bennett, its regional manager in Africa, had expected the SNO to shake up the market and create a more cost-effective backbone for domestic traffic, but now he fears he was naive. The only news emanating from the SNO "is that we can't expect much in the way of price breaks", he says.
"Our naive hope was that the introduction of the SNO would make Telkom more palatable when it comes to costs. But the noises are that there is not going to be much change.
"That's worrying because the entire market has been looking forward to that."
Equant's parent company, Orange Business Services, buys domestic telecoms services from practically all fixed-line operators around the world, "and Telkom is very expensive". Equant has focused on carrying international data for global companies with a base in SA, as well as serving SA's mining houses and some banks.
This week it changed its name to reflect its global ownership by Orange, and is stepping up its activities in a bid to grow 30% this year. "We have changed our strategy from a passive role because of the regulatory environment to a far more aggressive approach," Bennett says. Growth has already begun by winning contracts from a cement maker and a brewery.
Orange itself is part of France Telecom, which is integrating its operations so global subsidiaries can offer fixed and mobile voice and data services, networking and IT services and outsourcing.