VoIP a disruptive technology for Telkom
In South Africa our voice call charges are still the major money spinner for Telkom but if we follow international trends it will not last long.
One of the big factors influencing the voice market is the use of VoIP services like Skype. VoIP services enable users to communication for free from PC to PC and VoIP calls from PC to telephone can be as low as 13 cents per minute. Compare that to Telkom’s rate of R1.30 for international calls and VOIP starts to look extremely attractive.
Telkom’s CEO, Papi Molotsane, has noted that VoIP is a disrupting technology that has to be watched carefully but also welcomed. "We need to embrace these types of technologies," said Molotsane.
Telkom are currently relaying some of their voice calls over their IP network but the cost savings have not really filtered down to the consumer. Telkom’s interim results did however indicate that the fixed-line provider is cognisant of the impact of VoIP on their revenue. They announced reductions in international and long-distance call charges but not local tariffs.
Many South Africans who use VoIP have discovered the great cost saving regarding calls to relatives or friends far away, but the local voice market has still not felt the true impact of VoIP because broadband penetration is still too low to really hit Telkom’s voice market hard.
For the quality of service on VoIP to be acceptable a broadband connection is required. The big market winners are currently businesses who are reporting significant savings in telecommunication costs through using VoIP.
It is further interesting to note that the local ‘Business VoIP’ is becoming increasingly competitive with players like Internet Solutions, DataPro and MWeb competing against Telkom’s voice services.
The residential VoIP market is however still relatively untapped. MWeb has recently launched their residential Voice over Broadband service, but this is only available to MWeb consumers with an ADSL account.
Increased competition in the residential VoIP market, especially from smaller broadband ISP’s, will most likely result in a significant rise in the use of this cheap technology to stay in touch with friends and family.
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