How increased IT spend can reduce opex costs

South Africa is well known for nurturing some of the most successful mobile telecommunications companies in the world. It is widely accepted that we as a country are recognised for our forward thinking with regards to mobile communications and early technology adoption, which in turn has provided a platform for incumbent providers such as MTN and Vodacom to grow operations significantly across the globe.

May 24, 2011

With such a high customer base, it is always a challenge to consistently introduce new technologies to the market while minimizing interference with the consumer’s user experience as well as maintenance down time.

This was an issue MTN South Africa was recently forced to address. The provider, which was formed in 1994 and now holds mobile licenses in 21 countries in Africa and the Middle East and serves an estimated 116 million subscribers, had been experiencing issues with the architecture of its local data centre which required a change.

As a result, the data centre was unable to support 10 Gigabit networking and the deployment of new servers would take some time due to poor cabling infrastructure. This meant that MTN experienced significant delays when deploying new applications or subscriber services, which held the potential to lead to a reduction in subscriber satisfaction and also increased opex costs due to the nature of the legacy architecture.

To resolve this, MTN selected enterprise technology company Cisco to implement its Nexus Data Centre platforms into the company’s infrastructure. This has resulted in the significant reduction in two major opex cost areas, namely energy and floor space. The solution was also tailored to allow for future cabling to be easily incorporated into the overall architecture, which will allow for future projects to be easily implemented without a significant interruption in service delivery.

The application of Cisco’s Nexus Data Centre Architecture has also allowed MTN to improve its customer services by increasing time-to-market for new services. Higher speed 10 Gigabit networks will also allow users to access their MTN web portals and for service workers to access billing data more swiftly.

So, where does the relevance for business as a whole lie in this story? To put it plainly, it directly highlights the need for and benefit behind upgrading legacy network architectures to reduce opex costs and improve customer experience overall.

It is well known that following the global economic recession, CIOs are reluctant to spend capital on implementing new data centre architectures. What they arguably fail to see is that updated architectures are not only integral to maintaining customer satisfaction  as technology marches ever forward, but that consistently updating data centre based systems has a direct impact on operating costs and the reduction of energy usage.

MTN’s choice to take the bold step forward towards implementing a more modern, Cisco based architecture, instead of repeatedly maintaining a legacy based network system, should be commended and highlights the company’s commitment to delivering cutting edge services to the South African public.

It also lays the foundation for MTN to grow with Cisco in the future, allowing them to easily implement new services as the technology becomes available – while enjoying a significant reduction in opex costs on the data centre floor.