Black Thursday for IT sector

Losses by roughly 40 companies that were without internet services for at least a day or more, some of them in key industries including financial services, retail and travel, have run into millions.

Companies, including Shoprite, Game, Old Mutual, Sanlam, Namibia Beverages, Ellerines, Beares and Sure Ritz Travel, were in internet darkness from 15 June to late in the afternoon of 16 June, some longer, following the disconnection of the Internet Solutions company server by the Communications Regulatory Authority of Namibia (CRAN).

CRAN announced the switching off of the company's server as it did not comply with article 37(1) of the Communications Act. Internet Solutions is a South African-based company that offered cloud and internet services to clients in Namibia. It did not have a licence to operate in the country.

According to CRAN's CEO, Festus Mbandeka, a warrant was issued which allowed CRAN's inspectors to enter the data centres of both Telecom Namibia and Paratus Telecom.

Both companies were instructed to switch off the services of Internet Solutions. The company purchased network services from both Telecom Namibia and Paratus Telecom and resold these services under its own label.

“CRAN arrived with a warrant on 15 June and asked for the list of clients serviced by Internet Solutions and following this, we were instructed to switch their services off,” said Barney Harmse, Paratus CEO. He said about 300 clients, of which 40 were large corporates, were affected.

“In this industry we speak of Black Thursday because the communications of so many companies were utterly crippled. They had no internet, no email could be sent or received and in some cases, the telephone systems did not function. There were no transactions and losses on that day run into the millions,” he said.

“Critical stakeholders in the economy were also affected,” Harmse added, but would not provide any names.

The managing director of Telecom Namibia, Theo Klein, said it was difficult to estimate the impact of the action in monetary terms.

Klein confirmed that some of the country's biggest retailers including Shoprite and Game, and financial services companies like Old Mutual and Sanlam, were affected.

“The question is who actually provided the telecommunications services – is it us that provided the network or Internet Solutions that concluded agreements with clients?” Klein asked.

According to Klein, CRAN confirmed that Telecom had not acted outside of its licensing requirements, while Harmse said that a lot of work was done behind the scenes to ensure that CRAN's requirements were met.

“It is not that simple to switch to another telecommunications provider and we had companies that were completely stranded and needed urgent help. We decided to move those clients to licensed operators in the country to prevent any further losses and to get then online as soon as possible,” Harmse added.

“I am however, pleased with the way in which CRAN enforced the regulations in the country.”