Being viewed as a fully-fledged telecommunications operator allows Vox to make use of interconnect agreements where it was hamstrung before.
Vox Orion MD Jacques du Toit says deregulation in the market has allowed the company access to the “whole pie”. Previously, Vox was limited to outbound calls off its own network and did not receive interconnect fees.
The company now has the opportunity to act as a fully-fledged alternative telco, adding 34% revenue to its current business model. With interconnect agreements in place with all the operators, and a bulk discount rate for minutes on those networks, the company has the opportunity to run inbound and outbound traffic.
According to Du Toit, without the conversion from value-added network service provider (VANS), to the electronic communications network services (ECNS) licence, the added traffic across its network would not have been possible.
Under the terms of the old licence, VANS were not allowed to interconnect with the big five (Telkom, Vodacom, MTN, Cell C and Neotel). However, ECNS, combined with the electronic services licence, views the holders as fully-fledged operators, meaning they are now able to build their own infrastructure and interconnect with other operators.
Vox has also undercut competitors' prices, which could spark a voice price war in the market. The company has undercut all the operators, including Neotel. Calls to Telkom lines will cost 29c, almost 10c lower than Telkom's fee, itself 1c lower than Neotel's calls to Telkom customers.
The company has built a new offering around the new model, named Vox Cristal.
Despite the competitive pricing, Du Toit says there are still obstacles that need to be overcome.
He says Telkom put in place long-term service agreements with customers that include a bulk discount rate. According to Du Toit, while these customers are interested in the Vox offering, they are reluctant to move, since cancellation of a Telkom contract would require a payback of the discount.
Additionally, the slow implementation of geographic number portability has held customers within the grips of the incumbents. Currently blocks of 10 000 consecutive numbers are allowed to be ported, which few companies in SA have.
Adding to this, special numbers used for call centres, such as 0800 ITWEB (48932), are not included in the number porting. Du Toit says these are valued by customers and will never be available to the alternate telcos.
However, he says the company is determined to stir up competition in the telecoms arena and will make available what it can to customers.
Vox's consumer offering, Telepreneur, will also remain in the company's fold despite a possible drop in interconnect rates. Du Toit says the rate will have to drop below 40c before it will affect the offering, and even then, the company says it will simply implement its own network infrastructure to keep the cost in line.
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