iBurst: Ringing up new business
iBurst has become the latest Internet access provider to take the fight to Telkom by competing with the incumbent fixed-line operator’s bread-and-butter voice communications business.
The company, owned by WBS Holdings, provides broadband Internet access wirelessly to about 55 000 subscribers from 220-odd base stations located in the country’s metropolitan areas. It will target its new voice service, which uses the Internet Protocol (IP) to carry calls, at existing clients but also hopes that the service will help draw in new customers as it fights Telkom and the cellular network operators for broadband customers.
iBurst MD Alan Knott-Craig — he’s the son of the Vodacom Group CEO of the same name — says the company has concluded interconnection agreements with all the major operators, with the notable exception of MTN. These agreements allow calls to be carried between networks at agreed wholesale fees.
Knott-Craig accuses MTN of behaving anticompetitively, saying that the cellular operator is mandated by law to interconnect with iBurst and other operators. For now, iBurst will route calls to MTN via other networks.
Customers of iBurst can apply for their own telephone numbers (with the 087 prefix) and will be able to receive and make calls to cellphones and land lines worldwide without the need first to boot up a PC. The company’s telephone handsets, which resemble typical Telkom handsets, act as a modem for Internet access but also allow for standalone telephony. Subscribers can also use their own IP handsets connected to their PCs to make calls provided they are iBurst subscribers.
Knott-Craig says iBurst call rates undercut Telkom’s national rates by up to 17% and its international rates by as much as 50%. Calls to the US and the UK cost 39c/minute. He says network latency is low, though occasional network congestion may sometimes degrade call quality on specific base stations.
iBurst holding company WBS is 10% owned by Vodacom. Other shareholders include founder Thami Mtshali, who has the controlling stake, and Blue Label Investments.
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