Pinnacle Technology`s plans to launch what is effectively a legal call-back service is an indication that the local telecoms industry might finally be growing up, says the Communications Users Association of SA (CUASA).
A call-back service allows customers to make international calls without using Telkom`s lines, by allowing the caller to send a signal to an offshore operator, which then calls them back with a dial-tone. The offshore operators are generally global players, the likes of AT&T or Sprint.
Pinnacle claims its service differs subtly from a call-back service, and is known as a Call-On-Demand service, and reports suggest that the savings a company can achieve through such a service could be in the region of around 60%.
Ruan Malan, one of the designers of the system, says where it differs from call-back is the fact that it does not use a Telkom line to initiate the call.
"We use out of band technology, such as the Internet, WAP and SMS to initiate the call, which is why this is legal," says Malan.
"We are officially launching the product in November, and hope to have somewhere around 15% to 30% of the total international call market.
"We are not trying to do anybody in with this. The fact is that both Telkom and the cellular operators will benefit to some degree, as the incoming call will have to come through their networks somewhere along the way, so it is a total win-win situation - the operators will make money, we`ll make money and the customers will save money."
Stimulate competition
Although a 1997 ruling by the previous incarnation of the Independent Communications Authority of SA (ICASA), the SA Telecommunications Regulatory Authority (SATRA) stated that call-back services are illegal, the authority agrees that this one will be legal, provided it conforms to some critical criteria.
"If Pinnacle intend to provide this service, the Telecoms Act clearly states that calls originating in a foreign country must come through one of the recognised and licensed operators, which in this case is Telkom or Sentech," says ICASA`s senior communications manager, Jubi Matlou.
"Provided those criteria are met, then I cannot see there being a problem with the legality of the service."
"ICASA`s decision seems to indicate that the regulator is finally attempting to stimulate competition in the telecoms market, especially coming as it does on the heels of the ruling on least-cost routing (LCR)," says CUASA spokesman, Ray Webber.
"As far as we are concerned, call-backs are very similar in principle to LCR. It is, in effect, an updated version of the old 'Scotch Ring`, and I don`t believe anything like that should be illegal.
"This, along with the LCR judgement, is an indication that competition cannot be stopped and that the writing is on the wall for some of the issues that Telkom has been fighting to maintain its monopolistic hold on," says Webber.
He says in Telkom`s defence, however, that in recent times, it has substantially reduced the costs of overseas calls, so Telkom is also doing its bit in this respect.
'Overreaction`
Andrew Weldrick, Telkom`s senior manager for media relations, says that in terms of Pinnacle`s operation, the company does not really want to comment.
"There has been a ruling by SATRA on this topic, which stated that call-back services are illegal and it is up to the regulator to police and enforce such rulings, so we will have to wait and see what happens.
"There has also been something of an overreaction by the market to this issue. Our international outgoing call charges amount to only 4% of group revenue, so it isn`t nearly as bad as it has been portrayed in some quarters of the media," says Weldrick.
Reports have suggested that the three cellular operators could also feel the pinch, since Pinnacle has a cellular version, which allows users to send an SMS asking for a call-back, or another option which lets customers send an e-mail message requesting the same service.
Moira Sheridan, Cell C`s acting head of corporate communications, says the company will only work within a legal framework, but if ICASA has said that this is legal, then Cell C is happy to consider the opportunities that may arise from this.
"We obviously still need to do our homework on exactly how Pinnacle`s system works and what it means for us, but we would like to look at how we might be able to work with Pinnacle in order to reduce our overseas call costs.
"We are certainly viewing this as an opportunity, rather than a threat," says Sheridan.
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