Local not so lekker
Mark Slingsby, Managing Director of Vocal Pulse, lashed out at the local telecommunications market saying that large monopolies are undermining consumers and companies. According to Slingsby South African companies have to resort to extreme measures to provide local organisations with the bare essentials to operate a business on a daily basis.
“A prime example is the historical monopolisation of the telecoms sector by Telkom. In order to deliver cheaper calls we have been forced to resort to a method called tromboning. Here, we actually re-route calls to international service providers and back to South Africa in order to reduce call costs.”
“The only reason we have embraced this option is because it is cheaper to call from the United Kingdom to South Africa on a landline than from a traditional phone line in South Africa. This means it’s cheaper to call from South Africa to the UK and back to South Africa instead of just within the borders of the country.”
Slingsby further explains that this phenomenon is a direct result of Telkoms monopoly of the market place and the slow pace of regulatory change.
“A single business phone line from Telkom costs R165 per month. We provide five VoIP lines for merely R149. If you are running a smaller organisation and only require a single line there is no charge for that line and all that needs to be paid for are the calls, which are also offered at a substantially reduced rate. So I have to question why Telkom is so expensive.”
Telkom call rates to cell phones are approximately R1.89 per minute. Slingsby notes that even their highest retail rate for mobile calls is only R1.64 per minute.
“We offer a service whereby the more you talk the more your costs are reduced and as such there are huge saving benefits in using an international service provider as opposed to our local option.”
Business across international waters has increased considerably since the change in markets and socio-economic conditions in South Africa and more and more businesses are conducting teleconferences and communicating on a daily basis with sister companies, suppliers and customers in Europe, the Middle East and Asia.
According to Slingsby, calls to the UK via a landline cost a minimum of 90 cents per minute using Telkom as the service provider. However, using international service providers, Vocal Pulse is able to reduce these figures by more than half.
“We can also provide VoIP lines for businesses over iBurst for small business and wireless connections for larger business eliminating the need for expensive incumbent operators, which in this day and age offers numerous benefits in light of cable theft issues and long waiting lists for the installation of new phone lines,” says Slingsby.
However, Slingsby explains that this is not the only incident of its kind linked to the high costs of products offered by local service providers. Hosting providers are also forced to host high traffic websites overseas, as the cost of local bandwidth is still excessive.
“It is a very similar issue to the call costs problem where the pricing of local services is artificially inflated because of a lack of true competition. Competition is lacking because of artificially high call interconnection rates between Telkom, mobile operators and the old VANS providers.
“There are solutions out there to curb these exorbitant expenses being imposed on South Africans. We all need to stand firm, lobby government and perhaps, using technological solutions such as tromboning, we can curb and eventually demolish the current monopoly,” concludes Slingsby.
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