Telfree telling it as it is

Walter Betschel, CEO of Telfree, puts South Africa's anti-competitive telecommunications industry into perspective, challenges the hidden charges and lack of transparency and quality service in telecoms, and says long-term contracts are immoral.

On 1 February 2005, South Africa's telecommunications arena was deregulated, with the legalisation of voice over Internet Protocol (VOIP). South Africans, like people in many other countries before, expected to see lower rates for their local and international calls, immediately. This did not happen.

The regulator licensed several new entrants for the market under the much touted 'VANS' licence. Anyone with any interest in telecommunications, no matter how remote, wanted a slice of the telecommunication pie and so it seemed that a huge market shake-up that would bring more affordable communication to South Africa was on the horizon. This did not happen.

Industry veterans and experienced people, more cautiously, expected change to happen within three years. This seemed entirely reasonable for a country as progressive as South Africa, and which was, at that stage, leading the continent in the advancement of communication and access. Surely, liberalisation would be relatively simple for a country that understood the crucial impact of communications on a growing and pressured economy? This did not happen.

It took six years, a change of telecommunication ministers, ICASA chairmen and Telkom CEOs, plus the threat by Parliament to regulate the retail call rates in the market before we saw any meaningful change.

The impossible situation, whereby the wholesale rate charged to terminate calls onto the networks of the incumbent operators was higher than the retail rate the very same incumbent operators provided in their shops, has now changed, and prices have finally come down, making true the meaning of the word 'wholesale'.

The government and regulating bodies have, at last, created an environment where market forces may prevail, by enabling new entrants to play on a level playing field and begin to eat away from the incumbent networks' big cake.

The artificially high 'wholesale' rate also had a secondary effect on the South African market and presented an arbitrage opportunity for market players to make rampant use of SIM farms or least-cost routers (LCRs). While, for many years, this offered cheaper pricing options, it was to the severe detriment of voice quality, consumer choice and development of an efficient and competitive telecoms market in South Africa.

Again, while it is expected that the effects of the most recent changes will not be evident immediately, at least the discerning client now has the means to request transparency for his communications requirements, has the choice of who to trust and has the right get out of a contract within days if not satisfied with the provider's service.

The telecoms industry is used to taking advantage of their clients' ignorance. How can consumers really check what a particular phone call costs and how many minutes they have actually used when the statement arrives over 30 days later, once it is long forgotten?

What are set-up costs or kick-back rates - and what is breakage? Why are you getting money from people who call you back? Has anybody told them about the premium rates they are being charged by just calling back a number allocated to a so-called 'low-rate' service?

The big networks don't need to reduce their rates, as long as there is no critical mass created by the action of the new operators entering the market forcing them to do so.

The lower rates will only be for active and very informed users. That's why the incumbent operators have already announced that they are not considering reductions in call rates for their average clients - and especially not for those who need it most, the prepaid customer.

Telfree's service is based on efficiency, convenience and transparency and aims to give clients best quality for the lowest rate. In 2005, Telfree established a carrier grade operator platform with full SS7 (highest quality) connections to all the incumbent network operators in South Africa, and internationally, in partnership with Telekom Austria.

Matching the capability of any other incumbent operator in South Africa that can carry quality voice and SMS traffic, Telfree does so over its carrier-grade network and also delivers cutting-edge mobile, desktop applications and unified communications solutions - bundling voice, SMS, instant messaging/chat and e-mail, among others, for most major platforms, including desktop computers, iPhone, Nokia, Windows Mobile and soon Android.

Telecommunications make up one of the most expensive line items on a company's balance sheet, but Telfree is able to redress this with its business packages which specifically provide significant cost savings through free inter-branch calls for business branches located locally and internationally; very competitive call rates to any destination worldwide with savings of up to 50%; enhanced corporate productivity thanks to a range of communication mediums, including call, chat, SMS and e-mail; and ultimately, communication freedom, by being able to select the most effective way to communicate in any given situation.

Telfree's contracts are crucially only for a 30-day period. We believe that if our service offering is not the best for our clients at any time, then they should have the opportunity to leave us without hindrance or penalty. In a time of such rapid changes in technology, a contract tying a client down for longer than six months is actually immoral.

The Telfree Group is a privately owned group of companies headquartered in Switzerland, which provides pioneering value-added communication services of the next generation. Telfree has positioned itself to penetrate the 'last growth market', namely Africa and other emerging markets.

Telfree has points of presence in South Africa, Switzerland, Austria and the United Kingdom, with a key focus in South Africa as a platform for the rest of Africa. Telfree is fully licensed by ICASA to provide all telecommunications related services in South Africa.

In our current position, Telfree has the potent blend of being able to compete on a level playing field with incumbent operators, through its full operator SS7 carrier capabilities for voice and SMS, as well as providing value-added services that leverage IP connectivity like presence, instant messaging and push email, through its desktop and mobile applications, far ahead of any other player in the market. The ideal of unified communications is achieved across a range of products for the mobile phone, the computer/laptop and office PBX systems, thereby creating a user experience across multiple devices and media types.

Key to Telfree's competitive advantage is the group's vision to utilise the burgeoning capabilities of the de facto communication standard in emerging markets - the mobile phone - to create a mobile platform with the power to enable cost-effective voice communication, as well as a large array of unified communication mediums - all from the palm of a user's hand.

The Chief Executive Officer of the Telfree Group of companies is a true entrepreneur and a gentleman. He has established and continues to lead successful companies all over the world.

An Austrian by birth, Betschel has his primary residence in Africa, despite the Telfree Group being headquartered in Switzerland.

Betschel is internationally renowned for his ability to develop strategic frameworks and sales strategies for businesses, and his visionary capabilities to invest in industry sectors of the future long before they deliver on their promise. His skills have been honed through various qualifications and experience over several decades, including psychology, theology, sales and marketing, as well as music.