Vox Telecom is moving towards becoming a full-fledged telecoms company, taking on the giants in the industry.
The company's move towards providing the entire range of telecoms offerings comes on the back of its migrating of least-cost routing (LCR) customers onto its own network, Cristal Vox.
Cristal Vox allows the listed telco to offer a range of voice communications services instead of only competing on outbound calls, which accounts for a third of all voice traffic. MD Douglas Reed explains that the recent regulated interconnect cuts gives the company clarity and allows it to build its model for the future.
Vox wrote down its LCR business Orion by R809 million during the year to August, on the back of future lower mobile termination rates. The write-down hampered earnings, which came in at a R678 million loss. Adding back impairments, the company reported headline earnings up to R71.7 million.
The Independent Communications Authority of SA last month announced a termination glide path that will see mobile interconnect rates settle at 40c a minute from March 2013. Fixed rates for local calls will end up at 12c, while interconnect for national calls will be 19c a minute.
Reed says the clarity gives the company the opportunity to grow, and Cristal will provide Vox with a network backbone from which it can turn LCR business Orion into a complete telecoms company. Vox spent R48 million on the network during the year.
Vox would have preferred a slower glide path, says Reed, as this would have given the company a year or two more to get its network up to speed. However, being forced to migrate LCR customers will open up the opportunity to grow margins, as it can now offer its own services and not just on sell those of its new competitors, says Reed.
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