Local mobile operators Vodacom and Virgin Mobile welcome voice over IP (VOIP) services on their networks.
The cellular companies say VOIP is part and parcel of mobile Internet. This is in reaction to a new VOIP application, PrimeTel-Cel, run by PrimeTel, which claims to slash the price of calls made between phones using it.
"It`s a wonderful technology and yes, it could pose a threat to the revenue growth of telecom operators," says Nicholas Maweni, Virgin Mobile`s executive head of corporate affairs.
"We must remember though that mobile VOIP works wherever you have access to the Internet via WiFi or over 3G, which can be challenging at times in certain areas. This is because WiFi and 3G coverage in SA is not as extensive as the rest of the developed world."
Vodacom also considers mobile VOIP as another subset of mobile Internet. "Vodacom has always allowed VOIP on its network and deems it to be just another data stream, similar to sending e-mails, or browsing the Internet," says Vodacom Group spokesman Dot Field.
The solution
PrimeTel, in conjunction with Not Just Talk, from Exactmobile, launched a VOIP service that will allow users to make phone calls at reduced prices. PrimeTel claims its PrimeTel-Cel application makes use of the advances in 3G technology.
"We came into the country earlier this year and see ourselves as the first to launch such a solution that is targeted at mobile phone users," says PrimeTel MD Michael Alter.
Alter explains PrimeTel-Cel is downloaded as an application onto mobile phones that are Symbian and Windows Mobile compatible. The service makes use of the major cellular operators` backbone. PrimeTel-Cel uses the phone`s data capability and users are charged normal data costs, ranging from 10c to 20c per call.
Disruptive technology
"This has been long anticipated after what Mxit did for instant messaging," says IDC analyst Richard Hurst. He agrees that 3G is an enabling factor for this service. "3G is more of a data platform, but it does have uses for voice."
BMI-TechKnowledge MD Denis Smit is wary: "Mobile VOIP is a disruptive technology to the cellphone industry. It will have a major impact on revenue in the long run."
Smit explains mobile VOIP uses the cheap data network rather than the expensive voice network. "So you have voice call prices in cents as compared to the voice network that charges a few rands. This dramatically lowers the average revenue per user the operator can make."
He says cellphone companies may do "traffic shaping" on VOIP streams and recover some costs this way. Through traffic shaping, mobile operators control network traffic in order to optimise performance and the usable bandwidth. He adds bandwidth is a major problem, as voice quality is poor in some instances.
Other solutions
There are a number of VOIP services, including MWeb`s Broadband Talk, which allows people to make calls via an MWeb ADSL broadband connection, and Skype, which allows those who have the program to make free VOIP calls.
"The only other solution I can think that has a similar solution to ours is Skype. Yet, since it is based outside the country, it can`t count as competition. Plus the calls have to be routed outside the country, which hampers the quality," adds Alter.
In October last year, South African start-up company Yeigo launched a similar VOIP service in Europe. Media reports state the application also worked on Symbian and Windows Mobile compatible phones. The company later launched a second version, Yeigo Lite, for cellphones that do not have Symbian or Windows Mobile.
MTN and Cell C had not responded to requests for comment on the issue by the time of publication.
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