Business owners to rethink telecoms in 2011?

SS Telecoms' George Smalberger takes a look at South Africa's changing telecoms environment and the implications of recent structural shifts for business owners.

Over the last five years, South African businesses have put a lot of effort into setting up telephony systems that deliver cost savings in an expensive, mobile dominated marketplace. This work may well have to be re-examined, however, as key structural change impact on market dynamics.

“The most significant short-term change is the drop in interconnect rates,” says George Smalberger, MD of specialist telephony company SS Telecoms. “Least cost routing (LCR) solutions have been essential for most businesses seeking to mitigate against the cost of cross-network calls, but this will change quite significantly now. In fact, there is obvious evidence of this shift around already - the market is evolving fast.”

SS Telecoms has been designing, manufacturing and supporting telephony products across the telecoms spectrum for over 21 years. Its products are utilised in businesses of all sizes across the South African economy, and its extensive distributor partnerships give it interesting insight into the ongoing evolution of the local telecoms sector.

“A lot of companies are excited by Africa's investment in ICT infrastructure, and for good reason,” says Smalberger. “We've got the big WACS cable coming online next year, and another one in 2012. With bandwidth quality improving and costs dropping, we're likely to see the market seriously investigating VOIP solutions. So not only is LCR in some instances no longer essential, but VOIP is starting to appear on the horizon as a real option for any business.”

Smalberger says major shifts are likely to come in the middle range of the market, however, with the larger players adapting seamlessly to structural changes.

“The big guns have the resources and budgets to adapt as things change,” he says. “But in the mid-range and SME segments these kinds of decisions take longer and have a more direct impact on the organisation. Based on our 2010 experience and that of our distributors, this will be the really interesting segment to watch next year.”

So, will the average South African company phone bill shrink in 2011?

“Well, in theory, but in each instance it generally depends on the boss,” Smalberger says. “Getting the phone bill down is about understanding how your business works, and what solution will meet its needs best, and quality is vital, of course. A VOIP solution must actually deliver the right quality. The same goes for performance management. It's no good slashing your phone bill if you have to abandon the ability to control staff behaviour on the phone. So the potential to reduce the bill is there, but it will take good leaders to turn that potential into reality.”

The bottom line for Smalberger is that positive consolidation is occurring in the South African market, which is starting to open up properly for the first time.

“There are a lot of options out there now. Fixed-line, wireless, VOIP and so on,” he says. “This means genuine choice and flexibility for enterprises and organisations, and service providers will be compelled to innovate in their offerings, which is very positive for businesses and consumers. As a result, we expect to see quite a big shift in the way South African businesses approach their telecommunications set-up in 2011, continuing through 2012.”

- ITWeb