Operators should focus on service and content to differentiate themselves from competitors, rather than focusing on infrastructure, according to Mike Silber, head of legal and commercial at Liquid Telecom.
Silber told the Broadband Summit in Bryanston, Johannesburg, that operators needed to optimise their costs by cooperating on infrastructure and competing in services.
“Demand for mobile broadband and mobile bandwidth has grown very significantly. However, this growth will not be accompanied by a growth in revenue, as people want to save money,” he said.
“Our view is that content and service must become core. It’s not infrastructure build that is the core differentiator, it is the service you are offering.”
Silber believes operators must share the infrastructure and swap traffic locally.
“If they cannot go through that culture change of saying “everyone has access to the infrastructure, let’s compete on the services”, then they do leave themselves open to becoming an incumbent,” he said. “At the moment our biggest challenge is to encourage people to swap traffic locally.
“That’s how you grow your network. You differentiate yourself through prices, marketing, sales and services. You don’t differentiate yourself by infrastructure.”
He said South African operators needed to catch up with other countries in terms of infrastructure sharing.
“For some reason in South Africa infrastructure competition is seen as a huge competitive advantage,” he said. “But we see in other countries where operators just get on with it.
“South Africa is convenient, but compared to where the growth is happening on the continent, the growth is slowing down. Other countries that have been behind for so long now have the opportunity to leapfrog and they are taking it with both hands.”
According to Silber the potential is there for operators to transparently and legally share their resources and compete on the basis of cost and services.
“To me the anti-competition legislation is clear,” he said. “Anti-competitive behaviour is perfectly acceptable as long as its in the interest of the country.
“If its fair and open and transparent the commission won’t have a problem.”
