Gauteng Business News

Send  Share  RSS  Twitter  02 Apr 2012

VOIP: VoIP, Mobile Telephony and Broadband Threaten Fixed Lines


Recent Gauteng Business News

“The three biggest current trends in telephony are all related,” says Rob Lith, Director of Connection Telecom Broadband.

Along with the rise of mobile phones and mobile Voice over IP (VoIP), there is a related demise of landlines, with big implications for telephony (as well as broadband Internet).

This is true around the world.

• In developed countries, landlines have decreased by almost 10% since 2001.
• In developing countries, the trend is not as clear; with little teledensity to begin with in 2001, fixed line penetration first increased before dropping.
• However, the worldwide trend reflects the truth – we’re back where we were 10 years ago in terms of copper in the ground, and the big winner is mobile, and to some degree networked voice (VoIP).

South Africa

According to a 2008 BMI-TechKnowledge study comparing SA’s telecoms and broadband performance (services and pricing) with five “peer” countries (Brazil, Chile, India, Malaysia and South Korea), South Africa’s fixed line situation is similarly challenged.

Along with Malaysia, we are the only country with fewer landlines in March 2008 (under 10% of citizens) than in December 2000 (around 12%). Is this a case of bowing to the inevitable sooner than most other countries, or simply the work of an underperforming fixed line operator‘ And what of the effect of a declining copper base on the growth of ADSL‘

TelkomÂ’s Broadband 2011 Financial Results

Telkom’s financial results for the six months to September 2011 give a fairly clear indication of the answer. The numbers show a 13.7% increase in ADSL subscribers to 795 000 – 19.5% of the fixed line base (around 4 million). In other words, while fixed line penetration is waning, ADSL is growing in absolute numbers and as a percentage of fixed line installations.

ADSL growth is therefore clearly unsustainable, but to be fair to Telkom, the strategy is both predictable and reasonable, given the rise of mobile and the poor business case for copper in disadvantaged and rural areas. Where the install base of copper is mature, stable, and not under threat from thieves, ADSL can continue to grow. As for new installations and threatened areas, wireless (microwave over long distance and WiMAX over shorter distances) is the better broadband delivery model.

As for telephony, TelkomÂ’s response to these market issues has been to launch low-cost mobile carrier 8ta, which will ultimately give the company a winning value proposition as the only carrier with a fixed-mobile converged offering.

The Rest of the Broadband Market

In short, Telkom is a microcosm for the SA market as a whole: For now, as regards Internet, copper-based broadband is growing, but its stagnation is not that far off. As for fixed telephony, it is already on the wane.

By and large, the gap will be filled by mobile and wireless solutions, but also by networked voice (VoIP) offerings from a plethora of alternative telcos. Again understandably, it is not in Telkom’s interests to play in the VoIP market, as it would cannibalise its traditional voice business. Nor is the company keen to share last-mile ADSL access with VoIP service providers or to improve the quality of service of ADSL – which often makes up at least some of the access component of a VoIP solution, whether hosted or on-site.

Nevertheless, VoIP is making increasing inroads, worldwide as well as in South Africa. The VoIP and broadband technology is strong in greenfields implementations (new companies or branches) and as replacements of end-of-life analogue systems.

Business Profilesspine-alignsolarportBubble-ChairHBC-Solutions

Online Foreign Exchange
Foreign Exchange


Fax 2 Email



Online Casino


Shop Online

Study IT
Study IT Online

Web design
Web Design


Work from Home
Company News


© 2021 All rights reserved.

Daily Newsletter Subscription


Subscribe to the Gauteng Business News Daily News and information email (it's free).

Thank You
Your email address has been added.

Email Address: