Huge provisions for downturn

By Candice Jones for Huge Telecom

Johannesburg, 07 Sep 2009

Local least-cost routing business Huge Telecom has made R1 million in provisions for customers who may need extra time to pay during the economic downturn.

Huge CEO James Herbst says, while the company is seeing little actual bad debt, there are organisations which are looking for extensions on payment terms. He adds that Huge's decision to provide for the possibility of bad debt in its latest results set is a move to ease its credit.

“With the global economic downturn, some companies are looking for a little leeway on their payment options. While there is low bad debt in the business, we still need to accommodate those who need a little extra time.”

He says there is little risk in the debt services offered by the business, because the company is dealing with large and credible customers. The budgeted R1 million will allow clients who are impacted by the global economic crisis some space to pay.

He notes the group aims to benefit from the tight trading environment as companies look at ways to trim costs. “Last month, we signed over R15 million worth of new business and we are cautiously optimistic that this trend will continue. SA is officially in a recession, so many who were sitting on the sidelines waiting to see what will happen are now beginning to take action and cut costs where they can.”

Herbst says it already has 7 000 customers and plans to grow that figure this year. As a least-cost router, Huge says it's looking at various opportunities that are coming through increased competition in the telecoms space.

As part of the drive to increase its local footprint, the company has created a division to deal with channel distribution. Cellular veteran Greg Wright has been appointed to head up this unit.

Wright took up his position at the beginning of the month and has been in “serious discussions” with some of SA's larger resellers and telecoms businesses. He says the model will help Huge leverage customer contact, as well as increase the capacity for it to grow.