Telecommunication in emerging markets is massive and remains a key growth area the in light of recent shrinking values in other industries. Matthew Guest of accounting firm Deloitte says there is “plenty of opportunity,” while warning that are “too many competitors” in some African markets.
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So how does one stand out in such an environment? Startup ARC Telecoms is an IP telecommunications service provider company specifically dedicated to the small and medium sized business sector in South Africa. The company reckons its focus on small business puts it in the best position to differentiate from the competition and take up the massive growth potential in its target markets. The company offers a full suite of voice (VOIP), access, managed network services and hosted applications that are attuned to the unique requirements of the mid-size business.
The company, operating out of Sandton, Johannesburg, officially launched in September 2010, positioning itself directly in the telecoms space. It enters a section of the market dogged by competitors.
Locally if finds itself going up against the likes of Mweb Business, Vox Telecoms, Vodacom Business, Broadlink/WBS, Altech, Telkom and Neotel.
ARC is convinced, however, that its focus on the small and medium business sector in South Africa is the right one.
“Companies that have 20-200 users are our sweet spot,” says corporate CEO Steve Briggs.
To help distinguish itself, ARC offers what it calls a dedicated Account Manager to each and every customer account. “In a normal telecoms/internet service provider environment only the top few customers would have access to their own Account Manager,” says Briggs.
The company is funded by a venture capital company called World of Avatar who, along with the current management are the primary shareholders.
The three directors are all co-founders, Steve Briggs (CEO), Paven Chetty (MD) and Michele McCann. Briggs’ past experience includes overseeing the commercial elements of iBurst’s business as Head of Integration, while both Chetty and McCann hold experience in the IT sector.
Briggs says he believes the company has a creative approach to solving technology problems in the mid-tier market, making it unique. “We have a fresh, energetic approach to our business coupled with innovative products and services.”
He argues the company’s founders have identified a real need for a telecoms provider that could give cost effective enterprise-grade products and customer service to an underserviced mid-sized business market.
Briggs stands by the role he says his company can play in the broader economic context. “SMEs are the driver of the SA economy, consisting of close to 500 000 businesses,” he argues.
Briggs believes that by allowing their SME customers to be more efficient, more competitive and better able to do business with improved technology will have a host of positive spin-offs their client companies stand to gain. “The increased job creation, increased innovation and increased productivity which, in turn, will be adding to the bottom line of the SA economy,” he adds.
Being a single provider is a key feature of the company and a selling point in his view as “one telecoms provider that can offer the full suite of products and services. This means one point of contact for SME decision makers and one bill.”
So where did the idea to start a business emerge? Briggs attributes it to “collective industry experience” pointing out that the founders of ARC identified a gap for a serious telecoms player in the mid tier market and took it from there.
“Like the bigger corporates, our South African small and medium businesses need and rely on technology in order for them to fully harness their potential and competitive edge. We believe that high-end, cost effective telecoms solutions can enable these businesses to exploit their true potential,” he claims.
ARC currently has wholesale agreements with various national networks which Briggs says is not limited to a specific network capacity or coverage map. “We have a host of network vendors which allows us to source and select the most appropriate access medium for your business and location,” adds Briggs, who claims ARC deals with the big networks on their customers’ behalf.
Though the company does not have an international strategy as yet, they are quick to point out that many of ARC’s customers already operate branches and offices across in other African countries. “As such we have developed products and services to accommodate the requirements of our SA customers into these areas.”
Briggs explains that for now this allows ARC to get acquainted with the market outside South Africa’s borders without detracting from their key market.
He makes no qualms about the fact that his company is up against some big competitors. He also acknowledges that ARC faces having to rely on bigger infrastructure holders who may be your competitor on the one hand and a vendor on the other.
Despite the tough market, the company has a clear goal for the next five years: “Ultimately we would like to see ourselves as a dominant ITC service provider and the go to guys for the SME market.”
