Telecoms price 'should not be only concern`

Johannesburg, 27 Oct 2004

The deregulation of the telecoms industry will provide innumerable new choices for customers, but the real key is not the technology that will carry the traffic or the cost savings achieved, but rather the service provided by their chosen operator.

This is the view of Orion Telecom director, Jacques du Toit, who says that after 1 February, he expects a proliferation of service providers to spring up, offering huge discounts thanks to voice over IP, but that the old adage of 'let the buyer beware` will certainly apply here.

"The quicker a client understands that price alone should not drive their decision, the better for the entire market, as businesses cannot afford to compromise on issues of quality and service," says Du Toit.

"It is very possible that some companies will offer clients massive discounts on calls - possibly up in the region of 70% to 90% savings on the cost of a Telkom call, but that people need to understand that the quality of the line could be terrible and the service level agreements (SLAs) may be non-existent."

Du Toit says he knows of one financial institution that has said it will not even switch to the second national operator until it is well established, and even then only once strong SLAs are in place.

The reasoning behind this is that, since virtually all major client services are telephonic, it is not worth running the risk of losing a client because the service is not properly provided, just to save a few cents on the telephone bill.

"I believe there will be a lot of fly-by-night operators coming into the market next year, offering amazing discounts and promising people the world, but without the capability of backing these promises up, and customers are going to take a big hiding by falling for this," he says.

He says the problem with a lot of businesses lies in the fact that when putting together a major corporate deal, even something like a 20-second delay on the line could end up costing the company millions in lost revenue.

"In other words, it`s far more worthwhile in the long run for a corporate to accept a 30% discount on calls and a guarantee of good service levels, than a 75% discount on calls, but with no comebacks when the quality of service is poor.

"I think a lot of companies are holding off on committing to any new deals, as they are waiting to see what`s going to happen on 1 February.

"Orion even accepts that we will lose traffic through the deregulation, but we are also confident we will get it back over time, because customers will always come back to a company that offers good service and high quality."