South African consumers and businesses could see their telephone bills drop by up to 30% over the next two years, but only if all the benefits of lower interconnect rates are passed on to the end-user.
The high cost of communication has often been cited as a key inhibitor to business growth and expansion of the economy. Government has repeatedly said communication costs must come down to enable growth, but so far South Africans have yet to see big gains.
According to least-cost routing company Vox Orion, telephone bills will drop by 30% over the next two years due to lower interconnect rates as fixed-to-mobile calls become cheaper. “Lower interconnect rates mean everyone is paying less for their phone calls,” says MD Jacques du Toit.
However, it is unlikely all the savings will be passed on to end-users as voice revenue is under pressure, and operators are anticipated to hold onto as much margin gain as possible, notes analyst Steven Ambrose, MD of WWW Strategy.
Cheaper calls?
Last March, cellphone operators voluntarily cut the peak interconnect rate from R1.25 to 89c per minute. In October, the Independent Communications Authority of SA regulated interconnect rates.
Peak mobile termination rates dropped to 73c, while off-peak dropped to 63c this March. Another two cuts will come into effect before rates settle at 40c for peak and off-peak in March 2013.
Fixed-line rates will also drop, and will settle at 12c for peak and off-peak for local calls, while the rate for national calls will settle at 19c in March 2013.
Du Toit explains end-users will benefit if the entire interconnect rate is passed on by large and mid-tier operators. He says the total benefit since the initial cut last March will amount to as much as 42% reduction in phone bills. However, not all the players are passing on the total reduction. According to media reports, SA's largest fixed-line operator, Telkom, will only pass on between 50% and 70% of the latest reduction. ITWeb was unable to confirm this figure, as Telkom is in a closed period.
The fixed-line operator passed on 100% of the March 2010 cut, which resulted in a net interconnect loss of R24 million on fixed-to-mobile calls.
Du Toit says consumers and businesses using a Telkom line will see lower call rates as a result of a portion of the lower interconnect fee being passed on.
Cellular operators are also not passing on lower interconnect rates directly. Consumers have yet to see any significant savings as the country's two main mobile players, Vodacom and MTN, have categorically stated they would not pass on the savings to end-users.
The real benefit from lower interconnect rates will be felt by end-users who make use of mid-tier players, argues Du Toit. He says these providers will keep their margins stable, and pass on all of the cuts to their subscribers.
Du Toit expects the drop in voice tariffs as a result of lower interconnect fees to have the same effect as the drops in broadband data prices over the past few years. “Everyone is getting much more value for their money now.
“We've gone from using maybe 2Gb of data a month, to 5Gb to 10Gb to uncapped services, all at the same price. The same will happen with voice; people will either get more minutes for their money, or take advantage of other services.”
Profit game
Ambrose notes that operators can't afford to pass on all the benefits of lower interconnect rates, because voice is a dying business. “The fixed-line business is also in terminal decline.”
He says lower interconnect rates will trim the cost of making calls from a landline to a cellphone. However, he argues the saving won't be as high as 30%, because voice revenues are declining as data starts to take over.
“It is unusual that price reductions will be passed on in a declining market.” Ambrose says the only way end-users will see the full benefit is if volumes pick up, which will maintain revenue.
However, says Ambrose, the use of voice, especially fixed-to-mobile calls, is in decline. Real growth will be seen in the use of data and related products such as voice over IP (VOIP), he adds. “The days of massive price reduction in voice are gone, and they are not coming back.”
Huge Telecoms CEO James Herbst believes aggressive retail price reductions in the corporate enterprise market will only be offered by the fledgling VOIP operators, and aren't sustainable.
Minnows are operating on a business model that isn't sustainable because it's based on the assumption Telkom will only charge capital costs for its network, and not the cost of running the backbone, says Herbst. “Such business models are not sustainable as there is no such thing as a free lunch.
“Short-term price reductions offered by the VOIP operators will be fleeting and ultimately the costs offered by the incumbents will be the fair market price.” He says, as a result, retail rates for national and local termination will remain stagnant for the next two to three years.
- IT-Web
http://www.itweb.co.za/index.php?option=com_content&view=article&id=43176:telecoms-prices-to-fall&catid=118
Friday, April 29, 2011
Monday, April 4, 2011
Taking it to the Cloud: SMB's look to remote VoIP services, but Quality of Service issues remain
For a cost-conscious small business, hosted VoIP telephony makes sense: Rather than pay for both a business line and a high-speed Internet connection, purchase just the latter and then set up a VoIP service for a fraction of the cost. But moving the VoIP connection out of the office won't immediately solve some of the common issues and pitfalls of today's IP-based voice network.
Ease of setup and inexpensive subscription rates are among the key factors driving the growth of VoIP services worldwide. This is most strongly reflected among residential consumers, who make up 69 percent of the worldwide market.
But businesses looking to expand are also looking for an IP-based voice solution that will grow with them yet remain cost-effective. That's driving growth in areas like SIP trunking--to the tune of a 143 percent increase in revenues in 2010, says Infonetics Research--but also creating a niche market of affordable business-grade options for SMBs.
That's where managed IP PBX services come in. Hosted services grew 20 percent last year as more businesses looked for ways to get expanded voice options at a lower cost.
But hidden among all the rosy news on hosted business VoIP are more than a few thorns.
Hosted PBX solves many of the problems involved in managing a VoIP connection locally, taking some of the burden off the IT department. In theory, IT guys no longer have to spend time tracking down problems with voice latency or network shutdowns, and they don't have to be as mindful of any processes eating up bandwidth needed by the local IP-based voice network. This should free up the IT department to concentrate on numerous other issues they face daily in keeping an organization's computer network up and running.
Once the IP-based phone system's management moves off-premise, however, the IT director isn't completely unburdened. Tom Adkins of Tele-Source Ind. Inc. recently pointed out weaknesses that both hosted and on-premise VoIP can experience:
Ease of setup and inexpensive subscription rates are among the key factors driving the growth of VoIP services worldwide. This is most strongly reflected among residential consumers, who make up 69 percent of the worldwide market.
But businesses looking to expand are also looking for an IP-based voice solution that will grow with them yet remain cost-effective. That's driving growth in areas like SIP trunking--to the tune of a 143 percent increase in revenues in 2010, says Infonetics Research--but also creating a niche market of affordable business-grade options for SMBs.
That's where managed IP PBX services come in. Hosted services grew 20 percent last year as more businesses looked for ways to get expanded voice options at a lower cost.
But hidden among all the rosy news on hosted business VoIP are more than a few thorns.
Hosted PBX solves many of the problems involved in managing a VoIP connection locally, taking some of the burden off the IT department. In theory, IT guys no longer have to spend time tracking down problems with voice latency or network shutdowns, and they don't have to be as mindful of any processes eating up bandwidth needed by the local IP-based voice network. This should free up the IT department to concentrate on numerous other issues they face daily in keeping an organization's computer network up and running.
Once the IP-based phone system's management moves off-premise, however, the IT director isn't completely unburdened. Tom Adkins of Tele-Source Ind. Inc. recently pointed out weaknesses that both hosted and on-premise VoIP can experience:
- Security: Maintaining the integrity of the voice system during and after migration to a managed service.
- Equipment: VoIP phones installed on-premise can and do break; power surges can take out the phones, etc.
- Outside network issues: Distortions of signal or dropped signals due to a carrier on the public Internet or along the WAN, or a broadband or SIP trunk signal outage at the carrier CO (central office).
- Colocated networks: With many businesses opting for hosted services for both their IT and voice, often colocated, there's the risk that a change made on the IT side of the network will profoundly affect quality on the voice side of the network.
- Sharing bandwidth: When voice and data share a single feed into a business office, IT has to stay on top of the network setup so that one technology does not hog all the bandwidth.
- Will the company have a designated contact with VoIP expertise to maintain quality of service and help the SMB solve problems that crop up on its side?
- Is an element management service in place that will notify either the SMB's IT department or the host that an equipment problem is occurring on premise?
- What contingency is in place should the VoIP system fail--such as a failover to a designated POTS line on premise?
A look at the skills telecom, IT departments need when transitioning to SIP trunking
Workers in telecom departments may be understandably apprehensive about switching from TDM to SIP, since it could conceivably put them out of work.
But any company that adopts SIP and promptly lays off its telecom team while shifting responsibility for voice to its IT team would be making a big mistake, according to Graham Francis, CIO of The SIP School training and certification program. That's because people working in telecom teams have several skills that IT department workers might not possess, such supporting quality of service for real-time applications such as voice calls.
PRIMER: SIP trunking
"All the telecom guys are going to have to understand how voice and data will mix on the same network," says Francis, whose training sessions focus on areas such as SIP messaging, SIP security, troubleshooting and interoperability. "People with TDM backgrounds need knowledge about data switches, firewalls and proxy servers. They need to understand that on a data network, voice just becomes another application."
While there is still definitely a place for telecom specialists in enterprises that use SIP trunks, they'll have to learn additional skills if they want to make a successful transition from TDM to SIP. In particular, they'll have to learn much more about traditional IT tools such as session border controllers and firewalls, since a SIP trunk is a broadband Internet link that utilizes SIP to connect a company's IP-based PBX to an Internet telephone service provider (ITSP). Instead of terminating the trunk directly at the IP-PBX, for security's sake companies tend to terminate the trunks at a SIP-capable session border control system that acts as a firewall.
Jim Maloff, the principal consultant for Maloff NetResults, says the biggest difference that telecom workers have to get used to when switching to SIP is thinking about phone calls in terms of bandwidth rather than available lines. This means that for large conference calls they'll need to figure out exactly how much bandwidth they'll need beforehand so they can provision it off and give it priority over other traffic on the network.
"If I know that I'm going to have 10 concurrent calls then I should know that I'm going to need 1 meg of bandwidth just for my calls," he explains. "You'll need to do packet prioritization and shaping to makes sure that voice packets get higher priority."
Like Francis, Maloff also thinks that telecom workers can bring much-needed skills and perspective to the job of managing SIP-based voice networks that IT workers will need some time to acquire. However, he also thinks telecom workers should realize that preparing themselves to manage SIP will take a lot of time and effort since there are a lot more variables in a SIP system than a traditional TDM system.
"The hardest thing for people who have been in telephony is now there's so much more they need to think about," he says. "In the past if I'm a telecom manager I never had to pay for local outgoing calls. With SIP trunking it's more like a cellphone model where 'local' has no meaning because you're on the Internet."
Brian Graves, a network engineer at the University of Washington who has a background in managing telephony, says he has had to learn much more about implementing quality of service as his department started designing a SIP core that it plans on rolling out over the entire network over the next few years. The difficulty for many people on the telecom side, he says, is understanding that voice calls no longer get automatic preference for bandwidth or even the total amount of bandwidth they'll need to successfully complete calls on an IP network.
"TDM is a circuit-switched technology, so QoS is essentially built right in because you have a dedicated amount of bandwidth on your call," he says. "An IP network is packet-switched so you don't have natively the same bandwidth guarantee. You have to implement QoS to make sure it isn't delayed by other data."
But it isn't just telecom workers who will need to learn more about QoS to successfully manage SIP trunks, as IT workers could learn more about QoS as it applies to voice. Pete Allan, a network engineer at Bandwidth.com who has a background in both IP and traditional telecom networks, says that IT workers will have to change the way they think about handling voice calls on their networks, since traditional methods of handling other applications won't cut it. Instead, he thinks IT departments have to consider voice to be more like a frequent flier reward.
"If you're a frequent flier on a particular airline then you get to go in front of everybody," he says. "If you don't treat it like that then your call quality will be really degraded ... you can't just throw more bandwidth at it."
Maloff also says that IT workers are going to get used to the idea of implementing real-time sessions without any jitter or delays that would typically be acceptable for most IP-based applications.
"IT guys need to stop thinking in terms of storing forward and need to start thinking in terms of real-time sessions," says Maloff. "Voice is an extremely time-sensitive application and as an engineer I have to make sure that I have sufficient capacity."
- Brad Reed, Network World
But any company that adopts SIP and promptly lays off its telecom team while shifting responsibility for voice to its IT team would be making a big mistake, according to Graham Francis, CIO of The SIP School training and certification program. That's because people working in telecom teams have several skills that IT department workers might not possess, such supporting quality of service for real-time applications such as voice calls.
PRIMER: SIP trunking
"All the telecom guys are going to have to understand how voice and data will mix on the same network," says Francis, whose training sessions focus on areas such as SIP messaging, SIP security, troubleshooting and interoperability. "People with TDM backgrounds need knowledge about data switches, firewalls and proxy servers. They need to understand that on a data network, voice just becomes another application."
While there is still definitely a place for telecom specialists in enterprises that use SIP trunks, they'll have to learn additional skills if they want to make a successful transition from TDM to SIP. In particular, they'll have to learn much more about traditional IT tools such as session border controllers and firewalls, since a SIP trunk is a broadband Internet link that utilizes SIP to connect a company's IP-based PBX to an Internet telephone service provider (ITSP). Instead of terminating the trunk directly at the IP-PBX, for security's sake companies tend to terminate the trunks at a SIP-capable session border control system that acts as a firewall.
Jim Maloff, the principal consultant for Maloff NetResults, says the biggest difference that telecom workers have to get used to when switching to SIP is thinking about phone calls in terms of bandwidth rather than available lines. This means that for large conference calls they'll need to figure out exactly how much bandwidth they'll need beforehand so they can provision it off and give it priority over other traffic on the network.
"If I know that I'm going to have 10 concurrent calls then I should know that I'm going to need 1 meg of bandwidth just for my calls," he explains. "You'll need to do packet prioritization and shaping to makes sure that voice packets get higher priority."
Like Francis, Maloff also thinks that telecom workers can bring much-needed skills and perspective to the job of managing SIP-based voice networks that IT workers will need some time to acquire. However, he also thinks telecom workers should realize that preparing themselves to manage SIP will take a lot of time and effort since there are a lot more variables in a SIP system than a traditional TDM system.
"The hardest thing for people who have been in telephony is now there's so much more they need to think about," he says. "In the past if I'm a telecom manager I never had to pay for local outgoing calls. With SIP trunking it's more like a cellphone model where 'local' has no meaning because you're on the Internet."
Brian Graves, a network engineer at the University of Washington who has a background in managing telephony, says he has had to learn much more about implementing quality of service as his department started designing a SIP core that it plans on rolling out over the entire network over the next few years. The difficulty for many people on the telecom side, he says, is understanding that voice calls no longer get automatic preference for bandwidth or even the total amount of bandwidth they'll need to successfully complete calls on an IP network.
"TDM is a circuit-switched technology, so QoS is essentially built right in because you have a dedicated amount of bandwidth on your call," he says. "An IP network is packet-switched so you don't have natively the same bandwidth guarantee. You have to implement QoS to make sure it isn't delayed by other data."
But it isn't just telecom workers who will need to learn more about QoS to successfully manage SIP trunks, as IT workers could learn more about QoS as it applies to voice. Pete Allan, a network engineer at Bandwidth.com who has a background in both IP and traditional telecom networks, says that IT workers will have to change the way they think about handling voice calls on their networks, since traditional methods of handling other applications won't cut it. Instead, he thinks IT departments have to consider voice to be more like a frequent flier reward.
"If you're a frequent flier on a particular airline then you get to go in front of everybody," he says. "If you don't treat it like that then your call quality will be really degraded ... you can't just throw more bandwidth at it."
Maloff also says that IT workers are going to get used to the idea of implementing real-time sessions without any jitter or delays that would typically be acceptable for most IP-based applications.
"IT guys need to stop thinking in terms of storing forward and need to start thinking in terms of real-time sessions," says Maloff. "Voice is an extremely time-sensitive application and as an engineer I have to make sure that I have sufficient capacity."
- Brad Reed, Network World
Tuesday, March 29, 2011
WhichVoIP.co.za launches online Business VoIP Quotation Facility
Johannesburg, South Africa 30 March 2011 – www.WhichVoIP.co.za has further positioned itself as the leading Repository, Comparison and Reporting website for all things VoIP in South Africa by launching a Business VoIP Quotation facility that helps companies connect with Business VoIP Providers. The new Quotation Facility is simple, quick and most importantly; easy to use.
Voice over IP has become a viable option for all businesses and not just for large organisations. In fact, most Businesses in South Africa make up the SMB market – and in todays economy, this is where each Cent really counts toward the bottom line."
This new facility has significantly helped us address the growing need that companies have to re-evaluate their telecom costs, by allowing them to get connected with reliable, trustworthy and high quality VoIP service providers." Says Mitchell Barker, founder of www.WhichVoIP.co.za
"More and more businesses are considering switching to business VoIP phone service from their regular landlines but are faced with the uncertainty of a new technology. Our goal is to help people and businesses through the investigation process offering pertinent information related to the VoIP, and then the Commercial factors, which forms part of our Extensive Research Reports. Once our users have been through the investigation and evaluation process, we close the loop by putting these businesses in touch with the right people to make sure that there is follow-through with their project,” says Barker.
Businesses can take the first step towards major telecom cost savings by accessing the VoIP site at http://www.whichvoip.co.za. It is then easy to navigate through the providers and quote tool, with most users easily completing the process in under a minute.
Additional Functionality
WhichVoIP.co.za offers users the ability to purchase Research Reports, Compare VoIP Providers, Learn about the Technology, Query a VoIP provider by inserting the VoIP number, Sourcing a credible VoIP Associate through the National Directory, Collaborating with other Members in a Focused Forum, Staying in touch with VoIP News specific to South Africa; searchable by Provider, download Articles, read Interesting Blogs, and much more.
About
WhichVoIP.co.za is South Africa’s #1 Online VoIP Research and Reporting website which provides a central view of VoIP Telecoms Operators aims to take the Guess-work out of all the VoIP services and packages on offer in the Market.
WhichVoIP.co.za will not only keep companies who are investigating the technology informed prior to negotiation, but will also help providers and partners benchmark their services, align contracts, and truly be able to advise and offer their customers the best service suited to their business.
Thursday, March 24, 2011
The best and worst telecoms operators in SA
A basic analysis of feedback on HelloPeter reveals which telecoms providers attract the most compliments and complaints from subscribers - Rudolph Muller, MyBroadband.
HelloPeter has become South Africa’s most popular destination for consumers wanting to lodge complaints about companies from which they received poor service.
According to the HelloPeter website 42,895 complaints were lodged by South African consumers over the last 90 days, bearing testimony to the popularity of the consumer website.
Unsurprisingly complaints significantly outnumber compliments, but to try to establish an objective measure of the service levels of a company HelloPeter provides visitors with league tables which include a compliments/complaints ratio.
This ratio indicates which percentage of feedback received is positive, giving a loose indication of the service levels of a company.
The following table provides an overview of the compliments/complaints ratio of South Africa’s
telecoms operators over the last twelve months.
While a compliments/complaints ratio may be a fair way to measure service levels, a better way may be to measure the number of complaints per 1,000 customers received over the last twelve months. The following table does exactly that for the country’s largest telecoms companies.
Since HelloPeter is essentially a website where people complain about poor service, it makes sense to see how many complaints a certain company received when compared to their customer base.
It should be noted that the subscriber numbers listed below is based on the last publicly available figures.
HelloPeter has become South Africa’s most popular destination for consumers wanting to lodge complaints about companies from which they received poor service.
According to the HelloPeter website 42,895 complaints were lodged by South African consumers over the last 90 days, bearing testimony to the popularity of the consumer website.
Unsurprisingly complaints significantly outnumber compliments, but to try to establish an objective measure of the service levels of a company HelloPeter provides visitors with league tables which include a compliments/complaints ratio.
This ratio indicates which percentage of feedback received is positive, giving a loose indication of the service levels of a company.
The following table provides an overview of the compliments/complaints ratio of South Africa’s
telecoms operators over the last twelve months.
| Compliments/Compliments Ratio (larger is better) | |||
| Complaints | Compliments | Compliments/Complaints Ratio (%) | |
| Virgin Mobile | 2341 | 318 | 13.6 |
| Neotel | 583 | 79 | 13.6 |
| Vodacom | 7494 | 1002 | 13.4 |
| Cell C | 5960 | 667 | 11.2 |
| MTN | 7668 | 756 | 9.9 |
| Telkom | 1733 | 161 | 9.3 |
| iBurst | 487 | 19 | 3.9 |
While a compliments/complaints ratio may be a fair way to measure service levels, a better way may be to measure the number of complaints per 1,000 customers received over the last twelve months. The following table does exactly that for the country’s largest telecoms companies.
Since HelloPeter is essentially a website where people complain about poor service, it makes sense to see how many complaints a certain company received when compared to their customer base.
It should be noted that the subscriber numbers listed below is based on the last publicly available figures.
| Complaints per 1000 customers (lower is better) | |||
| Complaints | Customers | Complaints/1000 Customers | |
| Vodacom | 7494 | 25,300,000 | 0.30 |
| Telkom | 1733 | 4,300,000 | 0.40 |
| MTN | 7668 | 18,800,000 | 0.41 |
| Cell C | 5960 | 7,000,000 | 0.85 |
| iBurst | 487 | 70,000 | 6.96 |
| Virgin Mobile | 2341 | 300,000 | 7.80 |
| Neotel | 583 | 50,000 | 11.66 |
Tuesday, March 22, 2011
Its all change for Telecoms
It's adapt or die for SA's alternative telecoms network providers, as a wave of consolidation will hit the market in the next two years.
A shift towards converged offerings will see smaller players being gobbled up by large telcos, or close their doors, as companies battle it out for bigger client bases and access to IP-based infrastructure.
Smaller companies will be bought out, or disappear into obscurity, as the sector goes through its most dramatic change since the launch of the mobile operators.
Companies and consumers will be the ultimate winners as communication costs will be pushed down.
Reunert has already made the first move, buying ECN Telecommunications for an undisclosed amount, to bolster its aim of being a converged player in the next 18 months.
ECN CEO John Holdsworth says a wave of consolidation is coming within the next two years as voice and data – as well as fixed and mobile – offerings start converging.
Holdsworth says the market will become increasingly competitive, which will lead to consolidation as operators seek to grow market share and quickly reduce costs in an increasingly saturated market.
The only way to grow market share, says Holdsworth, is through takeovers, mergers and co-operation. “Dominant operators with a strong financial base will be able to acquire additional market share and technology.”
Holdsworth says smaller operators that do not have the necessary scale to compete with the larger companies are likely to either disappear or be bought out. Larger players with strong balance sheets – such as Telkom, Dimension Data, MTN, Vodacom and. Reunert – will be the “ultimate winners”, he believes.
Nashua Mobile CEO Andy Baker adds the wave of consolidation is “inevitable” and is being driven by a need for operators to have critical mass. Firms that only offer one product, such as least-cost routing, will be “in trouble”.
The result will be a sector dominated by a handful of large players, notes Baker. “The rate of change in the telecoms arena will be more extreme than in the last 10 to 15 years. We are entering a phase of massive, massive change.”
The shift towards convergence will lead to cheaper communications, and costs will come down by double digits for large companies, says Baker. This price reduction will inevitably spill over into the consumer market, he adds. “The savings can be material.”
Huge Group CEO James Herbst says Reunert's buyout of ECN will heighten the desire to be pre-emptive rather than reactive during the consolidation phase. “Reunert is one of many that will come, especially in the voice sector.”
Traditional least-cost routing and voice over IP companies will be targeted for buyout, says Herbst. Telcos want to buy up client bases, he explains, and it's cheaper to buy than to build. “Our businesses have value because of our clients.”
Smaller players like Vox and Huge are undervalued at the moment when considering their underlying assets and client base, comments Herbst. Buying out these companies will add massive value to cellular companies as they can strip out the overhead costs, he explains.
With the move to convergence, companies must “adapt or die” and smaller players will either be gobbled up, or slowly disappear, says Herbst. Mobile operators and companies like Altech Autopage and Nashua Mobile are “perfect buyers”, he adds.
Richard Hurst, senior analyst of emerging markets at Ovum, says many smaller alternative network providers are “positioning themselves to be gobbled up”. He says companies such as Vox and Huge Group will be snatched up by large network operators such as Telkom and the mobile players.
Hurst says smaller companies will be bought out because of their revenue streams, and larger companies will want to take out some of the competition. He says without vast infrastructure and a large reach to consumer and corporate clients, smaller players won't “really be anywhere”.
As a result, says Hurst, SA will end up with about four or five large companies controlling the telecoms sector and smaller players will find it difficult to compete.
-ITWeb
A shift towards converged offerings will see smaller players being gobbled up by large telcos, or close their doors, as companies battle it out for bigger client bases and access to IP-based infrastructure.
Smaller companies will be bought out, or disappear into obscurity, as the sector goes through its most dramatic change since the launch of the mobile operators.
Companies and consumers will be the ultimate winners as communication costs will be pushed down.
Reunert has already made the first move, buying ECN Telecommunications for an undisclosed amount, to bolster its aim of being a converged player in the next 18 months.
ECN CEO John Holdsworth says a wave of consolidation is coming within the next two years as voice and data – as well as fixed and mobile – offerings start converging.
Holdsworth says the market will become increasingly competitive, which will lead to consolidation as operators seek to grow market share and quickly reduce costs in an increasingly saturated market.
The only way to grow market share, says Holdsworth, is through takeovers, mergers and co-operation. “Dominant operators with a strong financial base will be able to acquire additional market share and technology.”
Holdsworth says smaller operators that do not have the necessary scale to compete with the larger companies are likely to either disappear or be bought out. Larger players with strong balance sheets – such as Telkom, Dimension Data, MTN, Vodacom and. Reunert – will be the “ultimate winners”, he believes.
Nashua Mobile CEO Andy Baker adds the wave of consolidation is “inevitable” and is being driven by a need for operators to have critical mass. Firms that only offer one product, such as least-cost routing, will be “in trouble”.
The result will be a sector dominated by a handful of large players, notes Baker. “The rate of change in the telecoms arena will be more extreme than in the last 10 to 15 years. We are entering a phase of massive, massive change.”
The shift towards convergence will lead to cheaper communications, and costs will come down by double digits for large companies, says Baker. This price reduction will inevitably spill over into the consumer market, he adds. “The savings can be material.”
Huge Group CEO James Herbst says Reunert's buyout of ECN will heighten the desire to be pre-emptive rather than reactive during the consolidation phase. “Reunert is one of many that will come, especially in the voice sector.”
Traditional least-cost routing and voice over IP companies will be targeted for buyout, says Herbst. Telcos want to buy up client bases, he explains, and it's cheaper to buy than to build. “Our businesses have value because of our clients.”
Smaller players like Vox and Huge are undervalued at the moment when considering their underlying assets and client base, comments Herbst. Buying out these companies will add massive value to cellular companies as they can strip out the overhead costs, he explains.
With the move to convergence, companies must “adapt or die” and smaller players will either be gobbled up, or slowly disappear, says Herbst. Mobile operators and companies like Altech Autopage and Nashua Mobile are “perfect buyers”, he adds.
Richard Hurst, senior analyst of emerging markets at Ovum, says many smaller alternative network providers are “positioning themselves to be gobbled up”. He says companies such as Vox and Huge Group will be snatched up by large network operators such as Telkom and the mobile players.
Hurst says smaller companies will be bought out because of their revenue streams, and larger companies will want to take out some of the competition. He says without vast infrastructure and a large reach to consumer and corporate clients, smaller players won't “really be anywhere”.
As a result, says Hurst, SA will end up with about four or five large companies controlling the telecoms sector and smaller players will find it difficult to compete.
-ITWeb
Monday, March 7, 2011
8 Things You Can’t Do With VoIP
If you’ve been considering switching your phone service to a voice over IP service provider, you have undoubtedly heard all the different things you can accomplish with a VoIP connection. What you may not have heard is what you CAN’T do with a VoIP. In spite of all the advantages, there are a few things that still cannot be accomplished through VoIP.
- Copyright © myISPFinder.com all rights reserved
- Talk without an internet connection. IP stands for Internet Protocol. So, you must have an internet connection in order to use the VoIP phone services. Therefore, even if the phone service itself were totally free, you still have the cost of the internet connection. In addition, if your internet service goes down for any reason, you have also lost your VoIP phone service as well.
- Talk when the power is out. You need electrical power to run your computer and you need it to power your router. When you lose power in your home and a VoIP phone is the only phone you have, your phone service will be out until your power is restored.
- Use your standard analog phone without additional hardware. VoIP does not operate through your regular phone lines. Therefore, to use a standard analog phone with a VoIP service you must have a converter that connects your phone set to your computer. This is accomplished in a variety of ways, depending on your provider, but the additional hardware cannot be avoided.
- Connect to a traditional fax machine. Actually this can be done, it just isn’t very effective and could cause you plenty of frustration as you attempt to send a fax through your VoIP connection. The issue involves the different type of data that a typical fax machine is trying to send and the difficulty in converting that data to a digital format. Scanning documents and saving them as pdf files for transmission is a better option.
- Call anywhere in the world for free. If you have gotten the impression from some of the VoIP advertising that you can call anywhere in the world for free, you are mistaken. It is true that most of these services do provide international calling as part of their service package. However, each of the service providers delivers service to only a limited number of countries and not every country in the world.
- Quickly switch your business phone system to VoIP. Business phone systems can be converted to VoIP systems to save money just like residential phones can be. Doing it quickly and simply may not be an accurate description though. Your current phone system and internal computer network would need to be analyzed to determine what all would be needed to make the conversion. What you currently have in place would make a big difference on just how complicated or uncomplicated the conversion would be.
- Use VoIP with a dialup connection. This would defeat the whole purpose of a VoIP connection. The point of a VoIP connection is to eliminate the cost of a phone line. You can’t do that if your internet is accessed through a dialup connection. In addition the bandwidth provided through a dialup connection is not adequate for the needs of a VoIP service.
- Control the weather. Even with the list above, it is easy to see that there aren’t many things that Voice over IP services can’t do. They are definitely quickly replacing traditional phone service providers. There was hope that they would be the answer to all problems, including inclement weather, however that has not been the case. Mother Nature remains on the loose.
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