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VOIP  >>  

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The ministerial directive legalising VOIP usage took effect two years ago. Not much has happened since, or has it?

ommunications minister Ivy Matsepe-Casaburri released her ministerial directives in September 2004, which, among other things, legalised voice over Internet Protocol (VOIP).

VOIP officially became legal on 1 February 2005 and the Independent Communications Authority of SA (ICASA) issued 087 number ranges to the value-added network service (VANS) providers in November 2005. At the time of writing, progress had been slow at best, but at least it has been made.

The market potential is huge, says VoxTelecom's Jaco Voigt.

Widespread VOIP adoption is dependent on several things, the first being affordable bandwidth. While it is possible to use VOIP over low-speed lines with high contention ratios, as many Skype users do, this is not feasible for corporate users.

The second is interconnects. There is no point in trying to call a cellphone via a VOIP phone unless the cellular provider and the ISP have an agreement to pass traffic from one to the other.

The take-up and usage of the 087 numbers ICASA allocated to the VANS in late 2005 is also dependent on the interconnect regime. No company is going to go to the enormous effort of changing its numbers only for said number not to be available to people dialling from Telkom phones, for example.

Good and bad news

The good news on the interconnect front is that the bulk of the major carriers and VANS have either finalised or are in the process of finalising agreements. The bad news, however, is that the interconnect rates offered by Telkom and Vodacom, in particular, are sufficiently high that, in many cases, it costs more to interconnect than it would do to use least-cost routing.

Not worth it

 

"There is no value in doing local calls."
Greg Hatfield, voice product manager, IS

Says Internet Solutions' voice product manager Greg Hatfield: “Telkom is offering interconnect rates of between 25c to 35c, which is not cost-effective. The cost of infrastructure is significant, so effectively, the cost climbs. While there will be a decrease in market prices and costs [due to competition], you'll not be able to make a national call for 30c unless the service provider elects to run at a loss.”

Hatfield says IS expects to see a 20% to 30% price reduction, which will be primarily on national calls. “There is no value in doing local calls,” he says. “Although we can offer a lower price, it is not materially lower.”

Orion Telecoms director Jacques du Toit says that, at the moment, “it is blue sky talk”. “It will be two to three years before customers see a fully interconnected VANS network. Capacity will be a problem,” he states. “As we add customers to the network and as the interconnected VANS community grows, we'll need to add links. And we need to get those from Telkom.”

Hatfield concurs: “Telkom is hampering the process in terms of its lack of resources.”

Next page: Pile on the red tape

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