VOIP experiences 'subdued` first year

Since the liberalisation almost a year ago of voice over Internet Protocol (VOIP) technology in SA, it accounts for only 0.1% of total fixed-line voice revenues.

This is according to Brian Neilson, director of BMI-TechKnowledge, who says the company`s mid-year research indicated SA would reach about R30 million in VOIP revenues by the beginning of 2006.

"Initial adoption has been subdued - VOIP still provides no truly serious alternative to the public switched telephone network as an all-round voice service for all calling modes and routes," Neilson says.

He believes that since Telkom rebalanced its tariffs, the biggest cost component for most small and medium enterprises is local calls, an area where VOIP does not offer any price advantages.

Industry players have a different view. "Most of our customers expressed a lot of interest in VOIP technology, especially the customers that had outsourced their networks to us - we were pleasantly surprised at the speed of the take up," says Ermano Quartero, director of Internet Solutions.

Quartero says Internet Solutions has implemented 15 VOIP initiatives in large corporations in the retail, health and international call centre sectors, and has many more waiting to go live. He declined to reveal the identity of the clients, saying they wish to remain unnamed for "competitive advantage" reasons.

Andy Brauer, CTO of Business Connexion, remains optimistic about VOIP as it enters its second year, saying an increasingly competitive local telecoms service provider market should drive down the costs of adopting VOIP.

Brauer admits that when one looks at replacing traditional telephone networks with VOIP and IP telephony, many people do not see the reason for doing so. However, he believes IP telephony provides a vital component for unified messaging and also greater integration capabilities in customer relationship management applications.

"It is the mapping of the old and the new that is the issue, but consider that Skype handles this with two additions: Skype OUT to call from IPT to an old analogue phone, and Skype IN to call from an analogue device to an IPT phone," he says.

Neilson argues that for VOIP adoption to grow significantly, greater competition in the area of long distance data networks is required, or alternatively we must see "a rigidly implemented wholesale regime designed to favour competitive service providers operating on top of Telkom`s physical infrastructure".

The second national operator could assist either or both of these mechanisms, but it could also provide a meaningful alternative to independent VOIP operators, further reducing the attractiveness of the technology, he adds.