Bring it on
AS SOUTH AFRICA’S telecommunications market gradually opens up, another alternative telco launched last week promising aggressive pricing – with claimed savings of up to 85% – and unique benefits, mainly to companies.
Funded by US venture capital (three individuals with previously high profile careers in the sector), PrimeTel is headed by Michael Alter, a man with experience in starting similar companies in other markets that were in the process of opening up to competition or were already highly competitive.
Alter’s done so in four Latin American countries over the past 17 years and says he decided last year that the time was right to come to SA. “We didn’t want to come here when the market opened because it wasn’t equal. It still isn’t – but it’s getting better,” he says.
Alter’s been based in Gauteng since January, with the company conducting its network testing with a handful of clients over the past few months. However, Prime-Tel recently launched commercially and promises to report back on major client wins as it progresses. It’s signed interconnect agreements with “pretty much” everyone, Alter reckons.
PrimeTel has a value added network services (Vans) licence under SA’s old Telecommunications Act but, unlike many other Vans, has no interest in seeing that converted to an electronic communications network services (ECNS) licence under the conversion process to the new Electronic Communications Act.
Alter says PrimeTel has its own systems but doesn’t see the need to build its own transmission network. Leasing the capacity from the incumbents remains expensive, but that should change over the next 18 months, Alter says.
For example, international bandwidth can be up to 50 times more expensive in SA than elsewhere, he says. “I’m a great believer in trying to be fair. As a business I must make money – but this doesn’t mean I should overcharge just because I can. That’s the philosophy of monopoly operators around the world. But it does change.”
Alter prefers not to be drawn on which companies PrimeTel sees as its direct competitors. He says when the market first opened up so did a number of out-of-the-garage voice over Internet protocol (VoIP) operators. Many gave the industry a bad name. He calls PrimeTel a “voice over broadband operator” – the difference being much higher quality and reliability.
However, by our estimations Prime-Tel seems more similar in philosophy to electronic communications network (ECN) than any of the other telcos, as it also doesn’t want to build its own infrastructure.
ECN was founded in 2004, started offering its services about a year ago – after signing interconnect agreements with all the major incumbents – and already counts 20% of all JSE-listed companies among its clients.
Alter says PrimeTel’s offering will be very price competitive, its calls quality will be excellent and its service levels unmatched in the SA market. A caller with a problem would receive a response within two hours; but if that hasn’t been resolved within four hours, it “comes straight to me,” says Alter. “The experience people will have with us will be completely different.”
All on-net calls – from one PrimeTel number to another, anywhere worldwide – will be free. But that’s not unique; other VoIP operators also offer free on-net calls.
There will be a number of differentiators, Alter says. With PrimeTel, services such as voicemail, caller ID, call waiting, three-way conference calling and call transfer would also all be free. Users receiving a voicemail would also receive an email with the voice file attached, to make it easier than having to dial in to your voicemail system periodically. Users can also view the duration and pricing of every call online in real time, Alter says.
Calls are billed on a per second basis from the first second and clients pay a rate per minute, no matter whether local, cellular, international (to 100 destinations), peak or off-peak, depending on the calling plan they choose. However, Alter says if none of its plans suits a client it can customise one on the client’s behalf. In each case, customers will get an 11c/minute rebate for every incoming call they receive.
The rebate system is not unique to Prime-Tel in SA, however. Vox Telecom also offers clients rebates: 20c on local and national calls and 40c on cellphone calls. PrimeTel doesn’t sell or charge for equipment but provides that free on loan for the duration of use, or could plug its lines straight into a company’s PABX system, Alter says.
There are no lock-in contracts: the service is on a month-to-month basis, and can be cancelled with a 30-day notice period. However, clients that do agree to use PrimeTel for a fixed term (18 months to receive the biggest discount) and pay by direct deposit, can get additional discounts of up to 5% on certain services.
Finweek
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