The fiercely competitive and quickly evolving global information and communications technology (ICT) industry has provided the supporting infrastructure for economic growth across the world in the past decade.

Despite its downward trend following the dot-com crash in the late 1990s, the ICT industry shows enormous potential with trends, technologies and policies driving its world.

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Telecoms companies are investing aggressively in next-generation telecoms networks to expand their global foothold. British Telecom (BT), for example, is trumpeting a £12m ($24.5m) investment in an international voice platform based on internet protocol (IP). Due to be completed in March 2008, the project is part of BT’s 21st Century Network (21CN) initiative. The network, based on multi-protocol label switching (MPLS), will span across 30 countries worldwide and, according to BT, will dramatically increase the scale of its global voice capabilities.

By year-end, AT&T plans to have invested more than $750m (double its 2006 investment) to execute more than 200 initiatives and accelerate the delivery of global IP services and solutions to businesses and multinational companies worldwide.

Globalisation leads

“Globalisation is a trend among businesses of which we are all aware,” says Geoff Webster, vice-president, global ventures and business development, at AT&T. “We look to follow our global customers or take the lead where there is a need for global telecoms services.”

It is a trend that global ICT suppliers and their service providers and enterprise customers are all experiencing, according to the Telecommunications Industry Association (TIA), based in Washington, DC. It predicts the industry will grow 12% internationally, 9% in the US and 7% in Europe by 2010.

“Opportunity exists for suppliers, and vendors are scrambling to provide that end-to-end product range, be it network equipment, wireless or landline service,” says Michael Nunes, TIA’s director of international and government affairs.

Driving overall worldwide demand is the need for data services and upgraded landline and wireless networks. Industry observers contend that advanced fixed and wireless technologies help to narrow the digital divide and can transform developing countries in particular to help them to compete in the global marketplace.

Opportunities for growth

TIA identifies Asia, South America and the Middle East as areas that offer the biggest opportunities for scaling up. “Africa is seeing significant growth because it is starting from a small base,” says Mr Nunes. “A lot of countries, especially those in Africa, are leapfrogging into new technologies such as wireless.”

AT&T is adding network nodes in Malaysia, Vietnam, Pakistan, Cyprus, Dubai and Saudi Arabia, as well as new network interconnections to the Nordic countries, Russia, Brazil, Azerbaijan, Georgia, Kazakhstan and Uzbekistan. It is particularly doing well in the Middle East through a partnership with system and network integrator and managed service provider NavLink.

NavLink serves customers in 17 countries across Europe, the Middle East and Africa, and globally through AT&T’s global private data network and global network of data centres. Since 2006, the partnership has made it possible for AT&T to expand in the Middle East in places such as Qatar, the United Arab Emirates, Saudi Arabia and most recently Kuwait. This is significant because AT&T customers require capacities in the Middle East.

“If you look at customers such as MasterCard Worldwide, Siemens and DuPont that we target for our global value proposition, all are saying they need to be in Dubai, Doha or Jeddah,” says Mr Webster.

This year, AT&T and NavLink partnered with Saudi Telecommunications Company (STC) to set up a data node, AGN, in Saudi Arabia. AGN, which is to be deployed in Jeddah by year’s end, will allow AT&T and NavLink customers to interconnect directly to STC’s nationwide MPLS network – the largest and most advanced of its kind in the Middle East. STC customers, in turn, will be able to access AT&T’s global network.

“Saudi Arabia is opening up to more FDI and investment even in telecoms,” says Mr Webster.

Most recently, AT&T has agreed to put a node in Kuwait with the co-operation of QualityNet, Kuwait’s leading data networking services provider. The companies will work with NavLink to activate the MPLS node during 2008.

Meanwhile, AT&T is growing its sales and support team in Dubai where it is also locating its regional headquarters. “You only have to go to the region to understand why,” says Mr Webster. “Dubai is in the middle of a commercial, financial, entrepreneurial and construction boom. Dubai is where our customers’ demand is most prevalent.”

AT&T can offer the same services in Dubai as it can in Austin, Texas, or London, says Mr Webster: “It is seamless on one secure virtual private global network with no regional variations or wavers.”

Mega markets

Needless to say, given the large inflows of FDI and buzz of corporate expansion activity, China and India offer massive ICT opportunities.

Nevertheless, the markets are challenging. In India, AT&T has worked hard to influence regulations towards a more liberated regime, even though it had already been operating a successful business in India for more than six years in partnership with VNSL, the country’s incumbent telecoms business. Consequently, it became the first foreign telecoms operator to secure new telecoms licences under India’s revised FDI policy. This allows up to 74% foreign ownership. In April 2007, it established AT&T India, a joint venture with Mahindra Telecommunications Investment Private.

In China, AT&T established interconnection agreements in 2004 with China Telecom and China Netcom to deliver services to clients. It cannot operate 100% in the marketplace, despite being the first foreign telecoms company to establish a Sino-foreign telecoms joint venture. Without being able to choose its vendors freely, its greatest challenge is meeting the data service needs of AT&T multinational customers.

“We do have a small 25% joint venture in Shanghai with Unisiti that provides basic IT services,” says Mr Webster. “But it is tough to operate in markets that are not liberalised to offer seamless service.”

Source: OCO Consulting