Uncertainty over interconnect rates and the fact that Telkom is still the sole national infrastructure provider could hamper growth in the South African telecommunications market, even though significant steps have been taken to liberalise the sector in recent months.
This is according to Gateway Communications MD Mike van den Bergh, addressing the VOIPWorld Africa conference in Sandton yesterday.
Challenges
Van den Bergh said besides the high interconnect rates, there are numerous other challenges facing valued-added network suppliers (VANS).
"The absence of a major alternate national infrastructure provider still creates problems, particularly in terms of the cost of facilities, but this should change with the launch of the soon to be licensed second national operator," said Van den Bergh.
"Although the ministerial policy determinations have gone a long way to liberalise the telecommunications market in SA, there is still some uncertainty with regards to licensing and regulatory requirements, which will require interpretation by service providers and the regulator."
He added that many challenges must still be addressed even though there is a growing number of VANS entering the market or enhancing their service offerings to take advantage of the new dispensation.
VOIP benefits
Van den Bergh said one of the major benefits of voice over Internet Protocol (VOIP) is its efficient utilisation of bandwidth. As this is still one of the major input cost components for deploying a VOIP service, appropriate end-to-end compression is vital to ensure efficient bandwidth utilisation of costly bandwidth.
"VOIP is able to maximise efficiency and increase revenue for services providers, who are then in turn able to pass on these savings in the form of lower charges to their customers.
"Among the key benefits of VOIP as a technology is that it is cost-effective, has lower support and maintenance costs, is highly scalable and can be used widely from large carriers to small and medium enterprises."
He said research group Gartner recommends that VANS and Internet service providers should consider offering VOIP services to increase both their revenue and the loyalty of their subscribers.
"One of the major changes that is going to occur in the market in terms of packaging is that there will be a growing trend towards delivering high added value services, together with low margin voice services, and this will be the key to sustaining VANS growth.
"I believe that over time the voice telephony market will move from the current high variable cost, low fixed-cost model, to one where services are at a higher fixed rate, and variable charges are much lower," he said.
Van den Bergh concluded that VANS have an "important and exciting" role to play as credible providers of voice services.
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