Project to cut telecoms costs
WHEN telecommunications costs drop after the launch of the $650-million (R6.6-billion) Seacom undersea fibre-optic cable in June, users won’t necessarily spend less, just the same amount on more products.
Consumers will be using a wider range of products and services, while sticking to the same budget, says Mike Silber of the Internet Service Providers’ Association.
Silber said some of ISPA’s 150 members are talking to equipment suppliers about starting to build their own network infrastructure, something they were not allowed to do until recently.
At the beginning of last year, only five companies were allowed to build and run networks, meaning that a few companies could enjoy limited competition and charge consumers high tariffs.
By the end of last year, a landmark court case against the department of communications secured the right of more than 500 companies to self-provide rather than piggy-backing on existing networks.
If this does not bring down prices of telecoms in the country, the launch of Seacom will.
The 15000km cable system will link southern and east Africa, Europe and South Asia.
Silber said: “We’re going to see a lot of new services rapidly entering the market. The drop in prices doesn’t necessarily mean people will spend less, neither will businesses.
“It’ll only mean that people won’t be so worried about astronomical bills at the end of the month. A lot of companies are already moving towards teleconferencing, and Internet protocol television will become a closer reality.”
While sectors of the economy crumble, the telecoms sector is still one of the most defensive.
Over the past five years MTN’s share price has trebled, while Altech and Telkom have double their value. This is despite losses made in the past few months due to the world economic downturn.
Mobile services went virtually unscathed by depressed consumer spending as MTN increased revenue by 35 percent, and Vodacom by 14 percent for the half year to September last year.
MWeb’s new product development manager, Kelly Ledger, said the company was working on several projects that would launch as soon as the Seacom system came online.
She would not specify the products in development, but said: “I think we will continue to see upward movement in mobile broadband, especially data straight to the phone.
“People will want to use applications such as bus timetables, bank balances and local restaurants,” she said.
According to Ledger, there are 5-million desktop Internet users, but 9-million mobile users in South Africa. “Once people stop fearing how much they’re spending, they’ll be using things such as Youtube more often.”
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