SMEs 'out of VOIP revolution'

By Paul Vecchiatto for storm
Johannesburg, 20 Jun 2005

At least 50% of South African companies have been excluded from the voice over Internet Protocol (VOIP) revolution because of the market structure, says Storm joint-CEO Tim Wyatt-Gunning.

He was talking to ITWeb following the announcement that the Internet service provider has developed a VOIP product for companies that have a monthly phone bill of less than R3 500.

"Most of the offerings out in the market are for companies that have phone bills from R6 000 per month upwards and that excludes at least half of all South African companies," Wyatt-Gunning says. "We have not seen much from any of the other service providers catering for this segment of the market. Those that say they have such services are, in effect, offering a callback service."

Storm says that since February, corporate quality VOIP has only been a viable option to companies with phone bills of R8 000 and above because the fundamental technical requirement is a Telkom-supplied Diginet line.

The costs of installing and maintaining this connectivity represent the billing threshold below which it is not financially viable for service providers or their customers to migrate to VOIP.

Local market research company World Wide Worx says only 4% of local small businesses will have implemented VOIP by the end of this year.

Wyatt-Gunning acknowledges that a critical problem for small businesses is that enough of them must start using the technology in order for it to become viable and this will help reduce costs.

"Our development team has ensured we have a few offers, which are positioned incredibly close to this threshold so that more companies can get 'on net' because as more businesses do, the threshold can reduce even further," he says.