Vox Telecom to ‘smash Telco costs’
Vox Telecom is taking the fight to Telkom with services like its ADSL Phone. The service provides ADSL subscribers with an easy means to cut down on call costs to national fixed line phones, cellular phones and international destinations.
Extending service offerings
The company is further readying to launch services aimed at SMMEs, mobile users and the dial-up market.
Vox’s ‘Mahala Dial up’, which provides anyone with a free dial-up account, is targeting people who typically use their dial-up account as backup or only for a few hours per month. The Mahala Dial up system carries a hefty R 1-09 per minute call rate, but the company will still have a standard rate dial-up service for more typical dial-up customers.
Vox Telecom is further planning to become a one-stop broadband shop by reselling most broadband services like iBurst and 3G to compliment its current ADSL offerings.
Bringing competition to Telkom
Speaking at a recent Vox Telecom event CEO Douglas Reed said that competition is the only way in which local telecoms prices will be driven down.
“We have the highest Telco costs in the developed world and are paying ludicrous cellular call rates,” said Reed. “The only way to break the status quo is competition.”
The Vox ADSL Phone service currently offers significantly reduced rates on calls to international destinations and cellular phones, and provides free off-peak Vox-to-Vox calls.
Reed however said that they are seriously considering making all Vox-to-Vox calls free, and that calls between ‘alternative operators’ like MWEB and Vox will be far cheaper than between Telkom and other operators.
Telkom has opted to set very high wholesale termination rates, Reed pointed out, and added that Telkom consumers will soon start to realize that they will be able to save lots of money by supporting Telkom’s competitors.
Drastic price reductions in the pipeline
According to Reed, Telkom has already been forced to launch call bundles to curb the impact of players like Vox and MWEB in the market, and that consumers can look forward to more savings in future.
“We can smash Telco costs by between 15% and 80%,” Reed said. The Vox Telecom CEO further said the company is working on far more affordable ADSL bundles which will definitely undercut Telkom.
When quizzed on whether Telkom may simply engage in a price war to undercut competitors, Reed said that it is not that easy. He pointed out that Telkom does not have massive margins to play with if it wants to maintain its current financial performance, and the company will have to become far more efficient to start competiting aggressively on price.
This, according to Reed, is unlikely to happen as there will be a backlash if the company announced more workforce cutbacks.
Telkom’s stranglehold on national and international bandwidth – one of the main reasons for the high local telecoms costs – is also under fire from players like Neotel, Vodacom and MTN as they are building competing fiber infrastructure. This development will further drive down most telecoms rates.
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