Gauteng Business News

Send  Share  RSS  Twitter  29 Nov 2010

Telecommunication: Companies Still in Recession, But Upbeat About Telecom Spend


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Emerging from the recession, industry sentiment is varied - half of businesses perceive the recession on the industry to still be detrimental, while 28% believe it is over. And while the majority of respondents will be spending a considerable portion (30-50%) of their overall budgets next year on telecoms, the overall sentiment towards spending on innovative technologies is not all positive.

These were some of the findings to emerge from a MTN Business survey that was undertaken to ascertain what corporate SA are thinking with regards to IT innovation, and maintenance as well as the apparent business related benefits. The sample was drawn from key MTN Business clients across business sectors and targeted CEOs, CIOs and IT Managers.

Says Angela Gahagan, executive of MTN Business; “The projected spend for 2011 does show a recovery from the recession. This, coupled with the fact that almost 90% of respondents view telecom investments as essential to business validity, indicates that future investments will not be placed on the ‘backburner’ any further. Where this spend will be allocated, however, is a totally different story!”

Despite almost 89% of respondents justifying their telecoms spend on the (the product’s) ability to differentiate their business offerings, only 39% of respondents had a positive sentiment (need to innovate) towards IT/Telecoms spend in 2011. 37% upheld a neutral stance (to maintain and refresh telecom infrastructure where necessary) and 24% stated they need to ‘hold back’ on any investments and continue to save. MTN Business believe this is a conundrum in itself, especially considering that innovative technologies allow the differentiation of business offerings and most respondents (94%) agreed with Gartner’s outlook on the significant link between IT innovation enabling effective CIO decision making (with 61% already seeing and reaping the benefits).

Continues Gahagan; “We are certainly not surprised by this conundrum if one considers the impact of the global recession then it’s only natural for recovering businesses to exercise caution on any spend going into 2011. Although less than half of businesses will be actively driving innovation strategies, an equal percentage believe that a year or two of consolidation will not hinder their ability to ‘catch up’ on IT innovation, and both these outlooks are positive for industry recovery and growth.”

Although sentiments are mixed, most respondents agreed on solution focus areas as priorities for their budget spend in 2011. High on the list in terms of telecom spend included voice and data communications (approximately 30%) with networking (28%) and cloud-based services (27%) following respectively.

“These are actually high investment figures for a recovering global economy and MTN Business believe it’s the approach and attitude of itself and other service providers that will make or break the growth and development of telecoms locally in the short term,” adds Gahagan. “We must be ready to assist customers on both innovative and maintenance strategies, and urge our competitors to have a similar outlook, if we are to minimise the effects of the recession and maximise customer innovative priorities in the coming years.

Concludes Gahagan; “Gartner rightly indicated that as the recession gives way to growth, there is great opportunity to take advantage of a recovering economy. As a value-added service provider, MTN Business is dedicated to continually building innovative communication solutions and with a strong focus on cloud computing and VoIP, we will continue to make it a priority to understand every customers’ individual requirements and help them take advantage of this growth.”

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