African operators 'deny, delay, degrade VOIP`

By Damian Clarkson, ITWeb junior journalist

Johannesburg, 02 Mar 2005

Monopolistic telecoms operators in Africa are hindering the roll-out of cost-saving technology, as they fear the loss of revenue brought about by increased competition.

Addressing delegates last night at a First Tuesday event dedicated to voice over Internet Protocol (VOIP), International Telecommunications Users Group executive director Ewan Sutherland accused the continent`s incumbent operators of deploying a '3D` strategy towards VOIP.

"They deny, delay and degrade VOIP. It`s not surprising as government can retain foreign currency revenues by blocking it.

"The general approach evidenced in Africa of prohibition is at best short-sighted, and at worst, a serious threat to innovation, eventual competition and overall consumer welfare."

This is particularly problematic as VOIP is an important technology that has the potential to transform telephony in Africa, said Sutherland. "VOIP goes away from monopoly structures and allows new carriers to offer lower cost structures in the same way GSM lowered prices," he said.

"The only way the incumbent will start passing on savings is when sufficient pressure is put on them."

The local scene

Even after the deregulation of the telecoms industry in February, many people were left wondering whether anything had changed, said Mike van den Bergh, Gateway Communications MD and a director of CommuniTel, one of the players in the second national operator (SNO).

"The announcement made by the minister was second in disappointment only to Y2K. We will look back and say that was an important day, but those who thought that something would suddenly and drastically change were wrong."

While adopting VOIP in SA would reduce communication costs by around 30% to 40%, VOIP uptake will be stifled by a lack of clarity on various legislative issues, says telecoms lawyer Lisa Thornton.

"There is the question of numbering. The Independent Communications Authority of SA (ICASA) needs to get on board with this, as we have not seen anything on an official basis from them regarding this yet. No one is regulating the setting up of a VOIP phone book at present.

"Then there is the interconnection issue: Can value-added network service (VANS) providers interconnect with network providers or anyone they want?"

Although interconnection is allowed - ICASA is currently addressing the issue - Van den Bergh says the costs are simply not viable at present. "Fees for interconnection need to be regulated so that they are fair for all.

"At the moment we don`t have a wholesale interconnect regime, so the minute you have to interconnect with someone in SA, costs rise dramatically."

Self-provision and the SNO

The issue of self-provision for VANS was also raised at the event, with Van den Bergh taking an optimistic outlook on minister Ivy Matsepe-Casaburri`s recent determinations. "These could just be a minor speed bump, rather than a massive pothole," he said.

"When the minister sent out the press release [stating VANS could not self-provide], yes, she said we all misunderstood her. But she also said she would readdress the issue in the Convergence Bill, which is theoretically due this year.

"The self-provision issue was a huge one, and it could be that she wanted to take time and deal with it separately."

Speaking about the possible impact of the long-awaited SNO, First Tuesday executive Mike Wright said it should also play a role in reducing telecoms costs. "They have a lot of other costs to worry about as well, so I estimate that we will see a 10% to 15% cheaper offering coming in.

"Executives need to see that the SNO and VOIP are new playing fields, and decide how to take advantage of them."