South African Business 2016 edition

OVERVIEW Information and

OVERVIEW Information and communications technology ICT spend is on the increase nationwide. Government is leading the charge in ICT spending. According to a new Frost & Sullivan report‚ titled ‘ICT Spend in South Africa: Public Sector’‚ the public sector saw an ICT spend of 5.9m in 2014 and they estimates this will reach 7.6m in 2019. Managed services and fixed and non-cellular connectivity accounted for 73.1% of these investments. According to Frost & Sullivan ICT Industry Analyst Naila Govan- Vassen, the development and uptake of eGovernment services will be driven by South Africa’s National Development Plan‚ the National Integrated ICT Policy Green Paper‚ and the Broadband Policy are expected to drive. “ICT spend will centre around updating IT hardware and data centres and on supporting systems integration‚ especially within the health‚ education and administrative departments,” said Govan-Vassen. Current expenditure at present is limited to day-to-day ICT requirements across national and provincial departments. Creating a fully digital government is challenged by: • Legacy systems necessitating upgrades. • Limited infrastructure to connect all public sector buildings. • Lack of a coordinated plan to enforce ICT standards and ensure interoperability within national and provincial departments. • Security concerns surrounding shared and cloud computing. • Shortage of skilled resources. • Limited Internet reach and citizen access to online content‚ preventing twoway interaction with the government. About two-thirds of South Africa’s ICT companies are located in Gauteng Province. The ICT sector has about 200 000 employees working for 6 500 companies and contributes 6.4% to national GDP (Wesgro). The sector contains a diverse range of hardware manufacturing, software design and various service offerings such as software management, systems programming and technical support. South Africa is highly regarded as a centre of software development and offers attractive inward investment opportunities, especially in: • Automotive electronic systems • Access control and security • Financial sector • Silicon processing for fibre optics • Integrated circuits and solar cells The combined ICT market in South Africa is estimated to be in the region of R60-billion. Spending on ICT is predicted to rise to R120-billion by 2016. (Continued on page 120) SOUTH AFRICAN BUSINESS 2016 118

FOCUS MTN plugs R1.2-billion into KZN network MTN is spending billions of rands in upgrading its network and infrastructure. MTN, the second-largest mobile operator in South Africa, is targeting an extensive fi bre rollout that will stretch to more than 1100km and which will service in excess of 36 000 houses within 1 080 residential estates and suburbs. It will also encompass more than 300 shopping centres, malls and business parks. The fi bre rollout and multi-tiered service offering applies equally to enterprise end-users as it does to home and SMME users, providing access to high-speed Internet Access and value-added or over the top services that traditional medium such as DSL struggle to deliver. Alpheus Mangale The rollout started in 2015 and MTN anticipates that it will be completed in 2017. Rolling out fi bre-to-the-home (FTTH) is seen as a vital step in building a world-class infrastructure to enable local businesses to operate on a world-class level, especially considering the national government’s drive to support SMMEs, entrepreneurs and local innovators. FTTH is capable of delivering speeds of up to 100 Mbps and, in support of the government’s drive, MTN have already rolled out FTTH to the Western Cape, which represents the fi rst expansion of its high-speed network outside of the country’s economic hub, Gauteng. Many in the industry view fi bre as the new frontier, and it is an area that the leading players in the industry all see as important to invest in. MTN has stated that their initial FTTH rollout will focus on “high-density urban areas, such as high-end gated communities, boomed-off suburbs, and high-rise buildings”. The scenic La Lucia suburb in KwaZulu-Natal is one of the fi rst in the region that will receive the service, with Umhlanga, Kloof, Berea West and Durban North also slated for FTTH. The civil works are well underway report MTN, whose South African subscriber base alone is just under 30 000. The company has already committed a total of R10-billion rand for increasing its coverage and capacity for its 2G and 3G clients, in addition to improving its long-term evolution technologies. MTN Business SA chief enterprise offi cer Alpheus Mangale has assured local residents as well as subscribers that the telecoms giant is “working tirelessly to resolve all outstanding issues to the satisfaction of all concerned”. 119 SOUTH AFRICAN BUSINESS 2016