SA corporates to leap into VoIP

1 February 2005

As of today, South Africans can use the internet to make local and international calls. This is the first step in the deregulation of the South African telecoms industry, until now a monopoly of state company Telkom.

The deregulation of Voice over Internet Protocol (VoIP) telephony is set to change the way in which many South African companies do business. This is according to a report compiled by technology researchers World Wide Worx.

VoIP is the use of the internet for the transmission of telephone calls. In this way, the use of a public switched telephone network is avoided. In South Africa – until 1 February 2005 – Telkom had a monopoly over this network.

VoIP can be conducted through a standard internet-enabled PC with a microphone and speakers. There is no additional cost to a VoIP call, above the cost of the internet connection. This means that in most cases, VoIP calls are effectively free.

Until now the use of VoIP has only been legal within company networks. The much-anticipated deregulation of the telecommunications industry, announced in September 2004 by Communications Minister Ivy Matsepe-Cassaburri, allows the use of VoIP for all calls.

The minister announced a number of liberalisation measures “designed to further accelerate growth in the [information and communication technology] sector” and “reduce the cost of telecommunications”.

In the survey, conducted by World Wide Worx, over half the organisations polled planned to adopt VoIP technology in 2005, over the 30% that already use it. It is estimated that almost 80% of South African corporations will be using the technology by the end of 2005.

Surprisingly, Telkom would seem to be a major winner in the industry’s deregulation. The fixed-line monopoly holder was named as the second most commonly named preferred provider of VoIP services.

“Mobile networks will probably be the biggest beneficiaries of all, but in a more subtle and long-term context” says report co-author and telecommunications analyst John Joslin.

Arthur Goldstuck, MD of World Wide Worx and the other author of the report, said they had interviewed “technical decision-makers at 100 South African corporations about their adoption and expectations of Voice over IP and least-cost routing – one of the key application areas for VoIP”.