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Sep 07, 2012

Lack of infrastructure, regulation hampering SA’s data industry

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Africa|Education|EMC Europe|Flow|Systems|Africa|South Africa|E-government|Fixed Wireless Services|Flow|Gross Domestic Product|Internet Protocol Communications Company Internet Solutions|Internet Solutions|Internet Solutions Carrier Solutions|Local Telecommunications Industry|Oil|Online Sales|Point-to-point Multihop Systems|Product|Products|Regulatory Framework Involving Last-mile Connectivity Technologies|Retail Sales|Service|Services|Systems|Telecommunications|Telecommunications Networks|Widespread Telecommunications|Brian Pinnock|Chris Hemingway|Greg Montjoie|Infrastructure|Raj Wanniappa|Rian Breed|Middle East|Broadband|IP|Regulatory Framework Involving Last-mile Connectivity Technologies
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There is an explosion of data across telecommunications networks in private and business environments, which is expected to continue, says Internet Protocol communications company Internet Solutions product strategy head Brian Pinnock.

However, the lack of infrastructure and an infrastructure sharing and regulatory framework involving last-mile connectivity technologies is hampering the transmission of this large volume of data to users. This not only reduces the volume of use and, hence, business involving data, but also the benefits of advanced telecommunications for society, says Internet Solutions carrier solutions head Raj Wanniappa.

“Online sales typically account for 7% to 10% of retail sales in developed markets. In South Africa, this share is closer to 0.5%,” explains Pinnock, adding that an increasing number of countries now see broadband as the backbone of their economies in the decades ahead because an increase in broadband penetration has been shown to have a strong stimulus effect on gross domestic product.

However, in South Africa, the increased use of broadband, which enables e-government, business use, education, job creation, innovation and personal data, is constrained by a lack of broadband penetration. Intensity of use and appropriate skills are also crucial, he notes.

“In South Africa, infrastructure has degraded and has been underused, resulting in a coverage problem. “Mobile wireless provided some relief, but does not provide an enterprise-grade service yet,” says Wanniappa.

The local telecommunications industry continues to contend with the delay in spectrum reallocation by governing bodies and has relied partially on test spectrum bands and unregulated spectrum bands for fixed wireless services, including point-to-point multihop systems, to bypass the lack of spectrum allocation, says Internet Solutions carrier innovation technology manager Rian Breed.

However, big data constitutes a type of “new oil” that can be generated by enabling improved and widespread telecommunications and data services. Global financial institution the World Economic Forum has recognised that data are assets to companies, says Internet Solutions cloud executive Greg Montjoie.

“Concerning regulation, government’s involvement in the situation has not played out yet and there will be more stringent demands placed on all organisations with regard to tracking and controlling data,” he says.

Key challenges concerning big data are the volume and speed of the data to be moved, which must also manage the connection latency sensitivities of different users. This will require analysis of these complex data streams, which include a wide variety of data from multiple sources, and will enable proactive data management, he explains.

This shift towards data analysis can result in, for example, matching data to a user’s preferences for online retail, or the management of data from an artificial heart to automatically regulate blood flow, says cloud computing and data company EMC Europe, Middle East and Africa emerging service providers director Chris Hemingway.

“Big data is disruptive and this is why analysis on big data will be important. However, increased use will have an impact and the volume of data will have a big economic impact,” he notes.

Meanwhile, Pinnock highlights that the increased use of technology, the rapid developments in electronic transactions and the variety of distribution media for products will necessitate a change in most business models. This is especially true where competitors are offering free and ‘freemium’ sales models.

Research done at the Massachusetts Institute of Technology in behavioural economics shows that, when contrasting demand for two products with a fixed difference in price, people perceive the benefits of a product that suddenly becomes free as dramatically higher than when it was simply low cost, further driving consumption. However, an average of 10% of users will still pay for a premium product rather than the free version, with important implications for online retailers, he explains.

“Business will have to reinvent itself in the face of the speed at which digital disruption is taking place, from redesigning a retail store to changing business models, and amid the waves of innovation that will cause rapid disruptions to existing markets,” Pinnock concludes.

Edited by: Martin Zhuwakinyu
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