Broadband is key to VOIP`s future

Johannesburg, 31 Jan 2005

Voice over IP (VOIP) is not actually a miracle technology that will vastly reduce the cost of basic telephony, as the future of VOIP is inherently tied to broadband, which is something SA is lacking at present.

Dr Angus Hay, CTO at Transtel, a 15% shareholder in the second national operator (SNO), says VOIP is simply a tool to help large companies reduce their overall telecoms costs and the infrastructure required to provide VOIP is broadband, so if you don`t have a broadband line, you can`t use VOIP.

He was speaking about the growth of broadband in SA, at the African Telecommunications Summit held last week at the Sandton Convention Centre.

"South Africa is expecting some kind of 'big bang` come 1 February, but I think the people hoping for this need to get a reality check," said Hay.

"What people don`t realise is that apart from the network owned by SNO members Transtel and Eskom Telecoms, there isn`t really a vast pool of under-utilised facilities available."

Because the key cost for players is backbone and access facilities, voice deregulation will mean little for small business and residential consumers, and it will only be large corporates and broadband users that will benefit from VOIP, he said.

"Besides that, there is still a lot of regulatory uncertainty, the mobile operators have only been given an incentive to raise their margins, not to reduce prices, and Telkom has already reacted to the minister`s announcement with a new, aggressive pricing regime."

Hay pointed to a Yankee Group report, which says high prices have prevented any development of residential broadband in SA.

"The liberalisation announcements, the forthcoming Convergence Bill and the launch of 3G services are all steps in the right direction, but SA definitely needs more in terms of true broadband development.

"We need government to come out with a broadband policy that will establish clear guidelines for infrastructure providers, as rolling out infrastructure is a costly and long-term business, so the providers need to be assured that it will be worth their while before they begin such a task."