Amith Maharaj interview
As head of a late entrant into the South African mobile industry, Amith Maharaj has experienced both its challenges and opportunities. In my conversation with Amith, I learnt that after having taken the market by surprise with the lowest rates for mobile data, 8.ta has more to come!
Since the launch of 8.ta, there have been many further surprises. Perhaps the biggest one was the latest data offering which made the rest of the industry sit up and take notice of the new player on the block. Some may have discounted the effects as these low tariffs apply to data consumption on 8.ta’s own network and not when roaming on MTN.
When I mentioned this, Amith was quick to respond that 8.ta’s network covers all the major metropolitan areas, many smaller towns and is rapidly expanding.
But how do you design and launch a cellular network that is at the cutting edge of available technology? “When the start-up team was formed we spent many weeks in a shared office, exchanging ideas and brainstorming how we could set up a mobile network that would offer users new and exciting, yet affordable services,” said Amith.
“Perhaps our biggest frustration today as a business is that we have so many great ideas and innovative services, that had we introduced them all at the same time, we would have overwhelmed our customers. One can only introduce a few new ideas and services at a time. This is to allow customers the time to become comfortable with the new ideas before introducing more innovations.”
Talking about the general mobile landscape in South Africa, Amith said that recent research has shown that South Africa has one of the lowest minutes of use compared with peer emerging market countries. “South Africans don’t talk as much as their counterparts in other emerging economies, which directly impacts the development of our economy, in comparison.”
Amith Maharaj
Price may be one of the reasons South Africans talk less by cellphone. Whichever way we look at it, communication costs are high. “On average South African’s pay R1,40 per minute, in China that cost is less than 14 cents per minute! Part of the challenge is the high mobile interconnection rates in South Africa. The recent reduction in the interconnect rates has come some way in cutting cellphone call rates, but not nearly enough to bring us closer to international rates.”
Amith sees another challenge in this debate about cost. Most cellphone users do not know or understand the various providers’ tariff plans. Providers tend to communicate their bundles but seldom pay much attention to educating customers about tariffs. It is thus no wonder that the average cellphone user does not understand how tariffs work. A company may offer reduced rates when the network is not busy, but does the customer really understand how and when he or she will enjoy these benefits to ensure a consistent and predictable cellphone bill at the end of the month?”
The advantage of being a late entrant is the ability to deploy the latest technology. 8.ta has no legacy equipment that had to be forklifted to make way for the new.
“We certainly made use of the opportunity. Take our billing engine –it is incredibly flexible and allowed us to introduce totally new concepts such as awarding prepaid customers free minutes based on the number of calls they receive, with the ability for customers to check the free minutes they have earned immediately after ending the received call. The converged billing system also operates in real time, giving both pre- and post-paid customers access to their monthly spend at anytime. This can unlock many opportunities and also assists in providing customers with a better service, as bill shock has been cited as a big challenge of legacy billing systems.”
It is said that cellular networks will ultimately negate the need for a fixed line network. Amith disagrees. “If one looks at how people consume data, only roughly 30% use broadband on the move while 30% use it at work and 40% at home. Seeing that fair usage does in fact occur at the home, and that spectrum is a restricted resource in South Africa for mobile services, it makes sense that fixed line services, especially for huge downloads such as video-on-demand, will ensure that fixed line will remain instrumental.
“Success for operators with data will depend on whether operators can provide fat pipes, with mobile only systems being hard pressed to deliver the bandwidth and quality of service that customers will be looking for. Telkom is well placed, being both a fixed line and a mobile operator. This will be the major focus area for Telkom in the short to medium term.”
So what is next? Amith was reluctant to share what is coming next. All he would say was “Watch this space!”
Source: EngineerIT
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