Transport, Communications and Media roll with the punches

The recession has adversely affected the Transport, Communications and Media sectors to a significant degree, but there is a positive side, which includes the preparations for the 2010 FIFA Soccer World Cup. According to Lesley-Anne Dos Santos, BMI-T’s Enterprise Research Business Manager, the event has to a large extent mitigated the effect of the economic downturn in South Africa in these sectors.

The economic downturn has affected some industries' ICT spend more than others. Road and rail travel ICT spend has been quite markedly affected due to reduced volumes of passengers and moving of products. Companies are scaling back spending as well as reprioritising and delaying implementation, while certain companies are focusing on replacing critical systems.

Transport and logistics has been negatively affected by the recession as well as the high price of fuel, as the transport of goods has been affected due to poor performance, especially in the manufacturing and retail sectors. At the same time companies like Transnet have also been struggling to turn around and become profitable, but the company is still required to spend huge amounts of money on infrastructure upgrades and maintenance.

Like the rail industry, air transport has had mixed fortunes, with SAA and ACSA being under pressure due to reduced passenger volumes, but in 2009, private carriers like Comair (which operates British Airways and Kulula in South Africa) still reported that they were doing well. Subsidisation of SAA and Mango still makes it very difficult to compete fairly but despite this they are also doing fairly well. Due to the demands of the 2010 FIFA World Cup, the air transport sector has had to spend money on upgrading infrastructure and, correspondingly, ICT systems and applications to improve security and efficiencies.

The communication and media sectors’ ICT spend are also driven by some very large projects that are as a result of convergence in these sectors, the emergence of next generation IP networks, the need for more bandwidth and platforms for integrated billing, content management and provision as well as more customer-driven applications. Tertia Smit, BMI-T’s Public Sector Research Manager, states that, with the convergence, liberalisation and consolidation of the ICT sector, this market is becoming highly competitive and companies need to adapt to remain in the game.

All these sectors have high technology needs with the communications and media companies having a higher percentage of knowledge workers than the transport sector, but all these companies still need basic hardware, software, IT services and telecommunication infrastructure to run their companies internally.

The Government’s resolve to remain committed to other infrastructure rollout projects in transport and communications is a further source of strength in those sectors.

Vertical sector analysis is essential during these tough economic times and with massive pressure on ICT budgets this information will enable vendors and service providers to craft attractive solutions to best penetrate desired markets. ICT vendors and service providers have to have an in-depth understanding of the use of ICT within South African vertical industries and the aim of BMI-T’s SA ICT Expanded Vertical Programme is to provide such guidance.