Holding hands — at a fee

Telkom has come down from the hill. The telecommunication giant’s initial reluctance to interconnect with companies that provide cheaper calls over the Internet has come to an end.

The telecom operator has over the past few weeks reached agreements with several voice over Internet Protocol (VoIP) service providers and is testing how well their networks are interconnecting.

Reaching an interconnection deal with Telkom legitimises VoIP operators, as they are still struggling to convince some business people that they can deliver cheap calls of good quality.

“VoIP is still viewed with scepticism by corporate customers,” says DataPro CEO Douglas Reed. The deal with Telkom assures the quality of the call as there is no delay in hearing what the parties are saying. Other details have also been ironed out: calls terminated on a VoIP provider’s network have to be allowed on to Telkom’s network and there is a clear understanding of how to bill the call.

“It has taken us quite a while to get to this point,” says Jaco Voigt, MD of Voxtelecom, the specialist voice division of DataPro.

In the next few weeks, the parties will test how well their networks connect with each other.

Voigt is pleased with the technical co operation he is getting from Telkom, but he’s not happy with the interconnection fee. This is understood to be 28c/minute, but few VoIP providers want to speak about the specifics of the rate because of the confidential nature of the agreements they have signed with Telkom.

Telkom declined to be drawn on whether the rate it is charging is fair. “Interconnection agreements between Telkom and VoIP operators are bound by confidentiality clauses which cannot be publicly shared,” says Lulu Letlape, the company’s corporate communication executive.

“It’s not at a level where we believe it should be,” Voigt says. He is not alone in his criticism. “It’s three times more than it should be,” says Greg Hatfield, GM for voice solutions at Dimension Data subsidiary Internet Solutions He says the fee “can’t be justified” on any basis and that Internet Solutions is looking at how it can reduce the rate.

He can expect some assistance from the Independent Communications Authority of SA (Icasa), the sector’s regulator. It held a hearing into interconnection earlier this year and is considering ways to cut the cost.

“We will definitely be intervening on interconnection,” says Icasa councillor Tracy Cohen, who chaired the hearing.

She says Icasa is unlikely to stop working on this until the rate is “in line with the real costs of providing interconnection”.

The recently promulgated Electronic Communications Act gives Icasa the power to intervene where it finds any abuse of market dominance.

The regulator is laying a strong base for this kind of intervention. It is compiling an economic analysis that splits the telecom sector into specific markets and names the dominant players in these markets. Icasa will be publishing various documents by January, at the latest, says Cohen.

Icasa will also be publishing revised interconnection regulations in the first quarter of next year.

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Holding hands — at a fee