SA telecommunications - a storm in a teacup? - 18 May 2005

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SA telecommunications - a storm in a teacup?

18 May 2005 News

Desmond Seeley, general manager: Telecommunications Services, T-Systems South Africa

This year is marked by a number of significant changes and developments on the telecommunications front. Already, the deregulation of VoIP (voice over IP) has enjoyed enormous media coverage and market movement; however, the proposed Convergence Bill and movements around the SNO (second network operator) are also set to cause a few headlines, albeit some more controversial.

Desmond Seeley

The Convergence Bill, which is now open for comments, challenges a lot of industry thinking and is proposing changes that we believe are not necessarily good for the growth of the telecommunications marketplace.

Our concern is that with the proposed licence structure the industry will become even more regulated, requiring licensing on the applications, services and telecommunications layers, and we will end up further empowering monopolies. As a value added networking company (VAN), we have proposed that the application layer should not be regulated. By creating a free market one opens up the avenue of choice for consumers.

Looking at the SNO, the reality is that we are not even out of the starting blocks yet with issues around stake holding delaying the entire process. But if and when we finally have a SNO it will in all likelihood target corporate clients and not consumers. So it will ultimately be the larger corporates that will benefit from more competitive pricing and not your everyday user.

On a more positive note, in the wake of the SNO all players can now finally start negotiating with Telkom as there is a more competitive marketplace out there. If anything, the SNO will liberate the telecommunications marketplace, giving us some bargaining power.

The flip side is that Telkom is increasingly acknowledging the importance of their partners, the company has become more forthcoming and is definitely mobilising around offering even more competitive options.

The deregulation of VoIP is in all honestly a storm in the proverbial teacup. It is running on the same hype cycle as WAP, CRM and ERP. The reality is that despite the fact that we can now utilise VoIP beyond the hop-on, hop-off scenario, South African bandwidth is still very costly.

The so-called 'last mile' and interconnecting also remain key challenges, while the verdict is still out on how rigorous VoIP technology is. The reality is that we still have a long way to go to fully reap the benefits of VoIP, and some large organisations will in all likelihood never opt for it.

The market needs to look at VoIP realistically, acknowledging its challenges such as bandwidth costing and approach it in a sober and practical manner.

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SA telecommunications - a storm in a teacup?

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