VOIP gains momentum in SA

The South African voice over Internet protocol (VOIP) market is only just beginning to emerge as a threat to the country's incumbent switched voice service providers.This is according to Gregory Massel, MD of independent telecom service provider, Switch Telecom, who says VOIP providers have yet to place much pricing pressure on the incumbent operators because they handle only a tiny portion of the voice calls in SA.
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"Most large companies, especially those that have big call centre environments, started embracing VOIP years ago as a means of driving down telecom costs," said Massel. "Small and medium businesses (SMEs), however, have yet to make significant use of the technology as a cost-saving strategy."The adoption of VOIP among SMEs has been held back by a number of issues: a lack of awareness about the benefits the technology offers, continued commitment to legacy technologies like least-cost routing (LCR), and poor fixed-line broadband penetration, Massel points out.One reason that VOIP adoption remains low among SMEs is that many of them do not clearly understand the value proposition.

Many of them believe that the cost-savings only accrue for companies that make a significant amount of outbound international calls, says Massel."Many don't realise VOIP allows companies to achieve savings on all phone calls to fixed-line numbers as well as mobile calls and even calls to special numbers, while LCR offerings address only mobile calls," he adds.According to Massel, the VOIP market is now starting to gather momentum and the switch voice operators will not be able to prevent it from impacting their bottom lines for much longer.Obstacles to VOIP adoption have fallen by the wayside over the past few years and VOIP operators now have the ability interconnect with each other as well as fixed and mobile network operators.

They also have the legal right to self-provide infrastructure, positioning them as telcos that can match the service offerings of their rivals."VOIP service providers are now competing with the incumbents on a more equal footing since they can now offer geographic number ranges, the ability for users to receive calls dialled from overseas and other benefits that were once exclusive to Telkom and Neotel," says Massel

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."They can offer all the features of a traditional POTS as well as lower costs and richer functionality. What this means is that VOIP providers will be in an excellent position to capture more voice minutes in the years to come and to put competitive pressure on the mobile and fixed-line operators,“ Massel concludes.