Ecstatic response to South Africa’s VoIP announcement

In the light of Thursday’s announcement by the South African Minister for the Department of Communications, Ivy Matsepe-Casaburri, that Value-Added Network service providers (VANS) may carry voice using any protocol as from Feb. 1, 2005, songs of joy can be heard across almost the entire ICT sector.

Sentiments from the ICT sector and the telecommunications sector, in particular, are very positive, as the liberalization of the sector means more business opportunities and greater possibilities for all and sundry.

Says Hillel Shrock, new business director at Internet Solutions Pty. Ltd. (IS): “IS and Dimension Data (SA) welcome the minister’s announcement, which is the most significant since the passing into law of the Telecommunications Act of 1996. We believe it is very likely to have positive ramifications for business and the general economy of the country.”

Says Shrock: “The artificial regulatory inhibitors have now been eliminated, and regulation is finally catching up with the available technology and its ability to provide business-critical communication services. Important benefits include pricing becoming more market-related and globally competitive. Businesses will now be able to utilize their existing infrastructure more efficiently, and their return on investment decisions will be favourably impacted. From February next year, inefficiencies that businesses had to endure by being forced to keep data and voice traffic separate will fall away.”

Sharing the same enthusiasm, MD of Avaya Inc., sub-Saharan Africa, Alain Schram says: “It is going to be great. The promise of IP Telephony (IPT) is going to take off at immense speed. This decision will unlock the investments that enterprises have made in IPT, and more people will finally be able to receive the benefits of what the technology has to offer.”

“Very good news is also the fact that virtual private networks (VPNs) can now run VoIP. Not only for the cost benefits for customers, but also because companies can re-sell communications over other networks. It will also have a huge impact on the international outsourcing call centre market,” he says.

Tim Wyatt-Gunning, MD of Storm Telecom, says that there are many opportunities for the company following the liberalization of the local telecommunications market. “The announcement allows us to continue to offer low-cost calls to local businesses, at last unimpeded by regulatory restraints, and with the eradication of any lingering doubt of illegality.”

Wyatt-Gunning also says that the company can now extend its range of services from international and cell calls to include low-cost national calls, as well as very low-cost interbranch calls for companies with several offices.

“It significantly lowers our cost base for these calls, since we can now offer all these services over our IP network and maximize the efficiency of our bandwidth. We expect to be able to offer those companies with permanent connectivity to us (Diginet, Wireless and maybe ADSL) savings of up to 70 per cent on international calls and 30 per cent on national calls,” he says.

He adds that with the reduction in costs the company expects to see an increase in minute volumes. He also adds there is still a lot for the company to do before February, and notes that these things will not happen overnight.

With regards to what the announcement means for the industry and consumers, Wyatt-Gunning says: “As long as there is a minimum of one underlying network provider, whose involvement at a retail level is carefully regulated, competition can be stimulated amongst a second tier of licensed service providers. Businesses and consumers will see more services at a cheaper price and there will be much more innovation in packaging and bundling services that are targeted at businesses’ varying needs.” He says that this will encourage inward foreign investment, as businesses have favored other countries in recent months.

“Regarding Voice over IP, there are bound to be ‘new technology implementation’ issues. Companies that try to implement it over their own networks may struggle to get the technology to work efficiently and realize promised savings. To deliver real benefits and quality service, implementation of the service needs to address both PABX issues and ‘Quality of Service’ management of IP bandwidth,” he adds.

Storm also notes that the Underserviced Area Licence holders may need to rethink their business plans, as they will no longer have the VoIP advantage.

The ISP adds says that the legalization of VoIP and other deregulatory issues will put severe price pressure on many of Telkom’s services. Notes Wyatt-Gunning: “Telkom could also benefit if it adopts a successful strategy, capturing the wholesale market, for example, selling to service providers, and gearing up for significant growth in demand due to lowering prices.”

As yet no statement has been made by Telkom SA Ltd. regarding the announcement and the possible implications that it could have on the industry and Telkom’s business. Ravin Maharaj, a spokesperson at Telkom, says that it is too soon for the company to comment, and that company representatives will be discussing the implications of the announcement in the near future.

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