Gauteng Business News

Send  Share  RSS  Twitter  15 Oct 2012

TELECOMMUNICATIONS: Growing VoIP Market Good for SA Telecoms


Recent Gauteng Business News

It is one of those great ironies: although telecoms is one of the least competitive business services worldwide, Voice Over Internet Protocol (VoIP)is emerging to be one of the most fiercely competitive.

VoIP has certainly been changing the telecoms landscape in South Africa in recent years. For a long time, the industry was held back by the country’s incumbent fixed line operator Telkom, which kept a tight grip on its monopoly due to lack of competition. Since it was government owned, the regulation was always in its favour and the operator was able to keep prices high, to the detriment of the consumer and the country’s telecommunications industry as a whole.

This all finally began to changemore than seven and a half years ago. “On February 1, 2005, the Independent Communications Authority of South Africa (ICASA) opened regulation, permitting a provider with a Network License to inter-connect with other carrier networks and to exchange voice traffic by using the Internet as their medium to connect subscribers,” says Mitchell Barker, CEO of WhichVoIP, a website that lists various VoIP and hosted private branch exchange (PBX) operators, allowing consumers one convenient place to compare prices and offerings. “After this legalisation of VoIP, operators began popping up in South Africa like daisies in the springtime.”

These days, there are over 500 companies registered and licensed by ICASA that are allowed to provide alternative voice services to South Africans. “This does not include the various resellers, affiliates, voice partners and consultants whom sometime trade under their own branding

The reason for this boom, says Barker, is because providers are realising that there is a desperate need for affordable alternative telecoms in South Africa. From their side, consumers and businesses are realising that VoIP provides them with a cost effective solution for making both local and international phone calls. "Since VoIP is just another software platform running on a server, many providers can – and do – offer advanced VoIP services for low cost,” Barker says.“But more importantly, call quality is not sacrificed.”

Just as the cost of PCs and software has been driven down due to immense global competition, millions of users and economies of scale, so has the market for VoIP hardware, software and services. The most expensive part of owning a PC over three years is the Internet costs, and the same is true of VoIP systems. By piggybacking VoIP on top of an existing internet connection, overall communications costs can be controlled much better.

“Although the cost of the calls is lower on VoIP, there are other advantages which may not be apparent at first. In any organisation, moves and changes of staff can play havoc with administrative costs. Just moving an employee from one branch to another, or even just to a different desk, can be an expensive and time consuming exercise with traditional telephony. With VoIP, by contrast, it is simple because the logic of who a system user is depends on the application, not where the person sits,” Barker concludes.


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