“ Banking and telecommunications are also utilitylike, in that we take them for granted until the service is interrupted and then business and social life grinds to a halt,” said Jordaan.
Jordaan and Harris were attracted to telecommunications because data has become the lifeblood of the modern economy and data demand is exploding everywhere.“ Soon, everything will be connected and connectivity is everything,” said Jordaan.
South Africa has a robust and competitive local telecoms market, but Jordaan and Harris are confident there is a space for a smaller player to be successful.“ We think that data prices are relatively high, that pricing packages are complex, and that pricing practices like paying more for out-of-bundle services and losing data at the end of the month are not consumer-friendly,” said Jordaan.
“ Voice services are going to become just another data app – like WhatsApp or Skype – and will be free in time.”
Jordaan said it will take up to three years before they have a nationwide network, which means their initial target market will be fixed-mobile – where their main competitor is fibre.“ We hope that we can help customers without digging up pavements or in neighbourhoods or business districts where there is insufficient take-up of fibre to warrant a roll-out,” said Jordaan.
One of the biggest advantages for WBS is that it can enter the market without any legacy network technologies: 2G, 3G, and LTE. This means it can roll out an LTE-A network from the start and migrate to LTE-A Pro and 5G when these technologies become commercially available.
They also do not have historic income streams to protect, which gives them the freedom to develop pricing models without having to worry about revenue cannibalisation.
Their investment in the South African telecommunications market is not only due to the commercial opportunities. The link between an increase in broadband access and economic growth means this new network can contribute to muchneeded economic growth in South Africa. It will also enable over-the-top and Internet of Things players to bring new services to the South African market.
Jordaan acknowledged that the investment does, however, carry huge risk.“ We must be the only LTE start-up in the world. Globally, the third and fourth operator in mobile markets tends to struggle, so we will be targeting a data niche rather than competing in a full-frontal attack,” said Jordaan.
The risk is worth it considering the potential benefits, he said.“ We hope to put South Africans and businesses in a position where they use data as if it is a human right and abundant,” said Jordaan. ■
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