Bandwidth constraints and last mile limitations are holding back the growth of voice over Internet protocol (VOIP) in SA, according to local industry players, who also say there is still room for growth in the sector.
A study conducted by In-Stat recently predicted that mobile VOIP usage among enterprises will grow to approach 83 million lines by 2015.
Another study by Infonetics Research notes that the residential services segment of VOIP remains the largest of the global market at 69% of total revenue, while business VOIP services are growing fast.
The research firm predicts the combined business and residential global VOIP market will reach $74.5 billion by 2015.
However, in SA, industry players agree that bandwidth issues, particularly last mile limitations, are holding back the VOIP industry. Local loop unbundling, which will solve last mile connectivity issues, has been on the cards for the past decade.
Last week, ITWeb reported that SA's telecommunications industry is heading for a battle over access to the last mile, as Telkom, the dominant fixed-line operator, is prepared to fight the process in Parliament and in court.
“Because of these limitations, local operators are not always able to deliver the voice quality that businesses expect. This is stunting growth in the uptake of VOIP,” says Graeme Victor, CEO of Du Pont Telecom.
On the other hand, Greg Massel, MD of Switch Telecoms, blames Telkom for SA's VOIP market lag. He notes that although there is fierce competition in the market, the benchmark rates set by the fixed-line provider are still much higher.
According to Which VOIP, for residential voice packages and monthly subscription fees, Telkom charges R114.91, while businesses pay R152.63. It adds that the residential subscription fee per additional voice channel is R114.91 and for business, it costs R152.63.
“Ultimately, this means we're well-positioned to offer quality service with strong support backing. By contrast, some of the more mature markets have such low pricing that it's become a pure volume game and they struggle to provide decent customer service on the tight margins,” says Massel.
Steve Briggs, CEO of ARC Telecoms, agrees, saying historical constraints in terms of a lack of bandwidth, high prices and insufficient infrastructure have resulted in SA lagging behind quite significantly in VOIP uptake.
In unison, Victor adds that VOIP is also more expensive than it should be because of last mile bandwidth issues. “Resolution of this bottleneck will have a dramatic and positive impact on the local VOIP market. The cost of VOIP is the main driver of uptake. VOIP is considerably less expensive than conventional telephony. However, until the last mile issues and skills constraints are resolved, uptake will be negatively affected.”
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