OBG talks to Robert Venter, Chief Executive, Altron

Interview: Robert Venter

What are some of the challenges associated with having the government as a key customer?

ROBERT VENTER: The biggest IT spender in the country is by far the state. Increasingly, the government has realised that sourcing from the local IT industry helps keep manufacturing and service jobs in South Africa. This is not a form of protection, but rather a way of supporting local industry and having a public-private approach to job creation. Unfortunately, for some of the major government-linked IT projects, there have been a number of bureaucratic delays. High turnover of senior-level ministerial staff often leads to hold-ups as requests for proposals that have previously been issued are sometimes left untouched and do not see the light of day again once someone is replaced.

How critical is local loop unbundling (LLU) for the industry and what obstacles exist?

VENTER: LLU is essential as the private sector and operators spend a lot of money on long-distance networks. But the off-ramps, meaning the connections from the telephone exchange’s central office to the customer’s premises, still remain in the hands of a state-linked monopoly. Only once this has been liberalised will prices in the market fully come down.

In the past, a major bottleneck for price reduction was the lack of undersea cables. Fortunately this has now been resolved. The one major obstacle that remains, I believe, is the last-mile infrastructure, which has to be freed up in order to be able to take full advantage of the other two pipelines.

Where are the most pressing needs for investments in the country’s fixed and mobile networks?

VENTER: On the fixed network side, more investment in terrestrial fibre-based networks is required. This is currently happening in the long-haul space, but to really improve the quality and capacity of broadband, investment is needed in the access network. On the mobile side, it will be investment in new generation technologies like 4G long-term evolution. Partnerships are globally becoming a reality given the significant amount of investment required. South Africa will see the same, and we have already evidence of this with the long-haul fibre networks that are currently being rolled out.

How do you see South Africa’s analogue to digital migration strategy unfolding?

VENTER: We were delighted by the decision of the Department of Communications to opt for the European standard of Digital Video Broadcasting - Second-Generation Terrestrial, which will give South Africans access to many more free-to-air channels than is possible with the older version. This will go a long way to reducing the digital divide.

Our concern now is getting the process moving. We have seen multiple delays since 2008, when the service was supposed to be launched, which has had a knock-on effect. The longer we delay, the less chance we have of meeting the International Telecommunication Union target to completely switch off the analogue signal by 2015. In addition, without a finalised set-top boxes (STBs) specification, manufacturers cannot start building STBs, which means viewers cannot buy them and the digital terrestrial television migration cannot properly begin.

What trends are you noticing in the evolution of electronic payment systems and solutions?

VENTER: With regards to credit cards, I have observed an increasing trend towards contactless payment in the transport and fast-food markets. The transport sector is using “tap and go” technology, of which it is at the forefront. This will move into other retail sectors. A second trend is the adoption of near field communication, particularly with respect to smartphone applications. A third trend is towards mobility and portability, and mobile payments (eWallet). Applications will soon extend beyond mere cash transfers and will allow for more sophisticated transactions to take place.