> ICT in South Africa - August 2005

ICT in South Africa
August 2005

This newsletter is produced by the Canadian High Commission Trade Office in Johannesburg, and contains ICT articles which would be of interest to persons interested in developing their business links with South Africa and in the region.


What is new!!!
The global Enablis Entrepreneurial Network (www.enablis.org.za) is to expand into Africa following a further R27.6 million donation over the next five years from Accenture and Telesystem. The donation was announced at the Business Action for Africa Summit in the UK, organised by the Commonwealth Business Council and Commission for Africa, in tandem with the G8 Summit in Gleneagles. The new funding will help Enablis expand from its current operating base in SA to new countries in Sub-Saharan Africa. Conceived at the 2002 G8 Summit, Enablis was founded by Accenture, HP, Telesystem and the Canada Fund for Africa, to support entrepreneurs in developing countries who adopt ICT as a significant part of their growth strategy. Enablis member entrepreneurs benefit from a range of business support and training services as well as preferential access to finance.
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Banks are moving to integrate their IT systems as technology strives to meet the demands of business, says Herman Singh, Technology Engineering Director at Standard Bank. Singh said business was looking for value for money from IT. This value translated into, among other things, the ability to keep systems running, having a good response time, ensuring good recovery plans and ensuring security and compliance with regulations. Business was also demanding agility  the ability to launch new products quickly, create new businesses rapidly, and to implement new forms of customer service, all the while keeping costs down.
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It has been reported that over US$200 million in investment interest has been made by African telecom operators to develop the Eastern Africa Submarine Cable System (EASSy), after an initial data gathering meeting in Cape Town, South Africa. The EASSy project is a 9,900km high performance under sea fibre optic cable aimed at linking eastern Africa to the world. The meeting was held to announce the project to a commercial, telecommunications and banking audience to attract equity investment and capacity commitment for the scheme. A detailed tender will be issued to suppliers with a view of beginning construction early in 2006. The project has support from the African telecommunications industry like Uganda Telecom and MTN Uganda, governments and development agencies like the World Bank, Development Group of South Africa, African Development Bank and the New Partnership for African Development.
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The South African IT services market is expected to grow to R27.5 billion in 2009, showing a compound annual growth rate of 8.4% from 2004 until then, says research firm BMI-TechKnowledge. Last year this market reached R18.4 billion showing year-on-year growth of 5.3%, and accounted for 40.9% of the total IT expenditure in the country (this includes software and hardware, but excludes telecommunications). BMI-T expects to see market growth for 2006 and 2007 in the region of 7.8% and 8.1% respectively. "IT services outsourcing (ISO), together with the deploy and support foundation markets, will continue to generate the largest amount of revenue over the forecast period, while the software as a service market will remain the fastest growing sector of the services market," says Natalie Bryden, senior analyst at BMI-T. Bryden adds that there is a possibility the services market will grow at a much faster rate towards the end of the forecast period as support for large events such as the 2010 Soccer World Cup.
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Plans are afoot to establish an IT security threat response centre in SA that will be able to react immediately to risks that threaten the IT industry. Representatives from government and the corporate and private sectors are in talks to establish the response unit, which would be manned by various IT security experts who could respond to threats and spread information that could help with the avoidance of potential risks. Information Security User Group of Southern Africa (ISGSA) Chairman Craig Rosewarne, who is representing the corporate sector in the discussions, says he has been approached by various government and private agencies to establish a response centre. Agencies such as the National Intelligence Agency have expressed a need for this initiative, he states. The ISGSA held its first meeting last month, where industry players highlighted the common failure of South African companies to report IT security breaches.
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The African Nepad Youth Conference on the Information Society held in Limpopo province was concluded by adopting a declaration titled the Limpopo Commitment on the role of youth in boosting ICT development on the continent. Around 500 young delegates attended the conference, which was held in preparation for the next round of the World Summit in Information Society (WSIS), to be held in Tunisian capital, Tunis, from 16 to 18 November. The Department of Communications and the Presidential National Commission on Information Society and Development hosted the event. According to the declaration, the conference led the creation of a report on concerns and challenges facing the development of the information society in Africa, and suggestions were made on resolving these challenges.
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Africa's ICT market analysts, BMI-TechKnowledge, have announced the publication of their latest report entitled New Directions in the SA Voice Market, which focuses on the changing voice services market in South Africa against the backdrop of the latest liberalisation of VoIP for VANS and ISPs. Richard Hurst, Analyst and co-Author of the report says that the market structure is still nascent and fraught with uncertainty - the regulatory environment alone poses major uncertainties, and the position of the future SNO and relative strength compared to the incumbents and challengers such as budding virtual network operators as well as the traditional VANS players - emerging network service providers (NSPs) or, at least, application service providers (ASPs), post convergence legislation, could best be described as a major wildcards at this stage. The fixed line voice services market has been relatively flat over the past two years growing from R17.1 billion in 2001 to R20.1 billion in 2004 and is expected to grow slightly to R21.1 billion in 2009, representing almost flat growth.
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African ICT market analysts, BMI-TechKnowledge, have released their latest report entitled IT Services Report and Forecast, 2004 - 2009, which has shown that the South African IT services market reached R18.4 million in 2004, showing a year-on-year growth of 5.3%, and accounted for 42.1% of the total IT expenditure in SA. Market value is forecast to grow from R18.4 million in 2004 to R27.5 million by 2009, reflecting a compound annual growth rate (CAGR) of 8.4%. BMI-T expects to see market growths for 2006 and 2007 in the region of 7.8% and 8.1% respectively. Natalie Bryden, senior analyst at BMI-T, says "The IT services outsourcing (ISO) together with deploy and support foundation markets will continue to generate the largest amount of revenue over the forecast period, while the software as a service (SaaS) market will remain the fastest growing sector of the services market."
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It has been reported that South Africas Science and Technology Minister will sign a memorandum of understanding with the Lesotho Minister of Communications, within the framework of the Southern African Development Community (SADC) and the African Union (AU). The main objective of this co-operation is to lift Lesotho out of a least developed country status to that of developing country and is aimed at sharing South Africa's successes in technologies that were related to poverty reduction and wealth creation at community level.
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It has been reported that South African company Transtel has won part of a deal to provide a satellite network to carry data traffic across the African continent. Transtel and Kenyan internet company Africa Online have been chosen by the African Internet Service Providers' Association to set up a data transport system to link Internet exchange points in different countries. The system will remove the dependence on overseas carriers. At present, countries not linked directly have to send data to the US or Europe and back to reach their neighbouring countries. The new links will reduce costs, improve speed and strengthen Africa's Internet backbone, the association says.
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ICT infrastructure development forms part of a R50 billion plan for infrastructure development in Gauteng. The Gauteng provincial and local governments have decided to collaborate on the plan over the next five years, to address infrastructure development across the province. This emerged at the Gauteng Intergovernmental Infrastructure Summit, which was attended by about 400 participants from government, business, labour and non-governmental organisations. Gauteng Premier, Mbhazima Shilowa, said it was necessary to find innovative ways to address infrastructure backlogs, boost institutional capacity, including project management and technical skills, develop appropriate financing models and improve integrated planning. Delegates to the summit noted that the gap between first' and second' economies had to be closed, Gauteng has aggressive economic growth targets to achieve by 2014, and Gauteng would host some of the 2010 World Cup matches. They agreed to collaborate to invest in significant infrastructure development, which would include roads and rail development, local government service delivery improvement, and target underdeveloped zones with second economy characteristics for expansion and provision of ICT infrastructure.


What is new in the SADC region???
It has been reported that the Namibian cabinet has approved N$2 million from the Social Security Commission's (SSC) Development Fund to assist 323 unemployed youths obtain information and communication technology (ICT) qualifications. The Ministry of Education's National ICT Skills Scheme aims to significantly increase the ICT skills of Namibians, especially unemployed youths, so that those undergoing training can obtain internationally recognised qualifications and that rural Namibians are given equal access to skills training.
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The Pan- African mobile network operator, MTN has announced that it has recently acquired the controlling state in Telecel Zambia and Telecel Cote d'Ivoire. The operator also announced that it had ceased its legal battle over its proposed acquisition of Celtel International. Phuthuma Nhleko, chief executive officer of the MTN Group, said that the agreement to acquire both of the operations was in line with the company's strategy to become the telecommunications leader in developing markets and growing shareholder value. According to Nhleko, the Telecel Zambia operation had met all the investment criteria of the group. Telecel Zambia is reported to have a market share of 21%, with roughly 150,000 subscribers and coverage in seven of the country's nine provinces. The company is also set to acquire a 51% stake in Telecel Cote d'Ivoire, which has over 800,000 subscribers and an estimated market share of 46%.
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The Nigerian, Second National Operator (SNO), Globacom, has announced that it has started a test phase of its landline telephony services in preparation for a roll out of services by the end of 2005. Bode Opeseitan, Globacom public relations manager, said "The test-phase has yielded satisfactory results, an indication that our landline service will be world-class." Opeseitan added that the company had been rolling out an extensive fibre optic transmission infrastructure across the country to cope with the estimated 2 million lines, with 50,000 lines reserved for Lagos and 20,000 for Ibadan. The transmission network has thus far been deployed along the country's major highways such as the Abuja-Kano Road, Kano-Bauchi Road, Abuja-Sokoto Road and Lagos-Benin highway. Opeseitan added that the fibre optic network being deployed has a self-healing feature.
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The Government of Mozambique has successfully implemented an e-government pilot project connecting 15 national public administration entities in Maputo. The initiative was funded through the Development Gateway Foundation's e-Government Grants Program, in partnership with the Government of Italy. Called Government Electronic Network (GovNet)-Pilot, the project is part of Mozambique's national Information and Communications Technology Policy Implementation Strategy, which aims to improve public services and increase transparency in the public sector. The pilot has established a common communications platform for the Ministry of Public Administration, Ministry of Finance, Ministry of Health and Ministry of Science and Technology, among others, giving them a unified e-mail system, intranet, and document management system, as well as cost-effective shared access to the Internet. The network is now being used by over 500 government employees via nearly 400 workstations.

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The national fixed line network operator of Zimbabwe, Tel*One has announced that it has entered into a US$1 million contract with Huawei Technologies of China for the supply and installation of equipment as part of the company's five year network expansion strategy. The equipment will be delivered on a pro rata basis. However, the deal contrasts sharply with that of an earlier agreement between the two companies in 2004 which entailed the delivery of telecommunications equipment and was then stated to be valued at US$68 million and was expected to increase the operator's capacity by an additional 1.4 million lines. The first phase of the deal was due to be completed by the end of March 2005. Wellington Makamure, managing director of Tel*One said that to the company's inability to gain access to foreign currency the objectives had to be altered accordingly but that the new order would be completed by the end of September.
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Zambian mobile network operator, Telecel Zambia is expected to be re-branded as MTN Zambia within the next three months following the 100% acquisition by South African based operator MTN International. Bwalya Chiti, Telecel chairman, said that the operator would become the largest player in the Zambian mobile market within the next 18 months due to the increased investment, such as additional equipment, branding and staff training being brought by MTN. Chiti added that the operator expected to engage in an aggressive network expansion strategy to bring mobile telecommunications to all districts and towns and that mobile communications "would never be the same" in Zambia.


Useful websites
Department of Communications www.doc.gov.za
Department of Trade & Industry www.thedti.gov.za
South African Technology Vanguard (SAVANT) www.savant.co.za
ICASA www.icasa.org.za
State Information Technology Agency www.sita.co.za
Computer Society of South Africa www.cssa.org.za
Information Technology Association: www.ita.org.za
Radio, Appliance and Television Association of SA www.tecnet.co.za/assoc
Black Information Technology Forum (BIT4M) www.bitf.co.za
African Telecom & IT Decisions www.mbendi.com/indy/cotl/af/p0005.htm


Upcoming events in South Africa and in the region
ACT 2005: The 7th annual African Computing & Telecommunications Summit (http://www.aitecafrica.com/act2005/index.htm) The African Computing & Telecommunications Summit (ACT) is the continents top gathering of IT users, suppliers, service providers, policy-makers and innovators. It draws together a distinguished and widespread range of decision-makers from all four corners of the continent. Delegates attend the summit in order to add to their own store of knowledge by capitalizing on the expertise and experience of their colleagues all over the continent. Dates: October 4-7, 2005 at the Crowne Plaza hotel in Johannesburg. For more information contact Brodie Osome on Tel: +1 613 233 3466 or brodie.osome@rogers.com.

AFRICA GIS 2005 (http://www.africagis2005.org.za) offers a unique opportunity and platform for organizations to showcase their respective experiences, expertise and achievements to a wide-ranging audience from the African continent who share common interests in the geo-information field. Natural Resources Canada and the Canadian Space Agency will have a pavilion at this event. A five day Technical and Project Exhibition will run concurrently with the conference, where exhibitors will be exposed to the influential delegates and decision makers participating in the conference. The Technical Exhibition would be a prime opportunity to showcase products, services and the latest technological developments in the GIS environment. Dates: 30 October to 4 November 2005 at CSIR International Convention Centre, Tshwane (Pretoria), South Africa

Contact us
Mr Israel Noko, Trade Commissioner
Canadian High Commission Trade Office
Johannesburg, South Africa
Tel: +27 11 442 3130 (ext 3353)
Fax: +27 11 442 3325
Email: Israel.noko@international.gc.ca
Internet: www.canada.co.za


Please note that while every effort has been made to ensure the accuracy of the information contained in this bulletin, the Canadian High Commission Trade Office will not be held responsible for any loss or inconvenience resulting from the application