Broadband woes hinder VoIP deployment in South Africa

While VoIP is going to introduce competition into the South African market and thereby drive down the cost of telephony, the lack of broadband adoption due to the high cost of bandwidth is still the key factor in utilizing VoIP technology.

Mike Wright, First Tuesday Executive, says these were some of the points that came out of the First Tuesday VoIP forum held this week.

Participating in the business and strategy panel discussion were: Mike van den Bergh, MD of Gateway Communications; Roman Hogh, M-Web business manger of product development; Lisa Thornton, an ICT lawyer and Wayne Venter of Nortel enterprise development. The forum addressed much of the hype and misunderstandings about VoIP.

It was agreed that VoIP will bring down costs, but Van den Bergh pointed out that for individual businesses a critical mass of calls is an important factor in ensuring positive ROI from VoIP. “When you are using a leased line, you need constant traffic on that line to justify the use of it. When one gets down to the lower end of call volumes, it is not a given that VoIP will save you money. A cost analysis needs to be done,” he said.

In a high call volume environment like a call center, Van den Bergh said that SA will benefit hugely from VoIP technology with many companies now likely to utilize the country because of the cheaper call rates. “Now SA not only has the skills, language and right time zones on its side, but cheaper calls will ensure competition with the likes of India and the Philippines,” he added.

The panel also pointed out in a response to a question about Telkom SA Ltd., that there had been a lot of hype about the technology, but that did not mean that Telkom will not be a major player, or that its infrastructure would not be used. Thornton said that the infrastructure will still be used, as VoIP will still have to run over some kind of infrastructure. This would most likely be Telkom’s.

Van den Bergh pointed out that BT Group PLC has been faced with competition since 1984, and, more recently, had to face the challenge of VoIP. “But people still buy most of their bandwidth from BT and terminate most of their calls on BT’s network,” he said.

While Hogh raised concerns about Telkom’s control of DSL and the incumbent control of bandwidth, Van den Bergh said there would be enormous political pressure to unbundle the local loop. This could see South Africa follow the U.K.’s example where the regulator split British Telecom into two companies — one to provide the services and the other the infrastructure.

The keynote address was given by Ewan Sutherland, executive director of the International Telecommunication Users Group (INTUG) live from Brussels, Belgium, via VoIP. Sutherland said VoIP was being used to close the digital divide. In some countries VoIP is being used to lower costs, so more affordable telephony.

“However in many developing countries, incumbent operators are denying, delaying and degrading VoIP. Some governments support this, trying to retain foreign currency revenues,” he added. Sutherland said VoIP posed a serious headache to emergency services and law enforcement authorities as well as security headaches with regard to denial of service attacks, viruses, worms, Trojans, Spam over Internet Telephony (Spit) and Voice over Misconfigured Internet Telephony (Vomit).

It also challenges regulators in the assignment of telephone numbers, quality of service, anti-competitive effects of bundling and access for the disabled to VoIP services, he concluded.

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