News
Interconnect Rate debate: Cheeky move by SA’s biggest operators
On Friday, SA’s two biggest GSM operators, Vodacom and MTN, undermined ICASA’s attempts to manage the lowering of interconnect rates by coming to an arrangement themselves following the break down in talks with ICASA. MTN and Vodacom made the decision to reduce the blended interconnection rate by 19% to 78 cents immediately. However they have not clarified what the ‘blended rate’ is and the reduction is likely to be higher on the off-peak rate than the current R1.25 peak connection rate.
While on the surface seeming like a noble gesture, in reality they may just be trying to take the heat off to avoid being forced into a larger rate cut such as the target 60c rate proposed by pariliament. ICASA are obviously not happy with being undermined like this.
“I am not surprised they decided to go ahead with this announcement as they are trying to recoup the lost PR ground,” says Paris Mashile of ICASA. “But they have not explained what the ‘blended rate’ is. Ask any lay person and they will tell you the rate they want to see reduced is that 125 cents per minute peak rate.”
Unfortunately for the consumer the lowering of the interconnect rate does not imply an immediate reduction in the retail price but at least the ball is finally rolling!
The saga continues… catch up on the prequels here
Astricon 2009 Updates: AsteriskExchange, AsteriskForge, Asterisk.org
The Astericon conference took place last week in the US with some interesting announcements from Digium. Digium announced the AsteriskExchange application store, an overhauled Asterisk.org community site and AsteriskForge for software developers. The three new offerings help formalise and unify the Asterisk community and confirms Asterisk as a disruptive force in the IP PBX market.
Over the past year, Digium has gradually grown its channel partner program worldwide. But for some VARs and customers, it’s often difficult to find Asterisk-compatible applications, hardware and related services. Digium is aiming to address that challenge with three key moves:
1. AsteriskExchange: A forthcoming app store of sorts, which will apparently allow partners and customers to more easily find Asterisk-compatible applications and services.
2. AsteriskForge: A central location for developers to share and track new Asterisk-related software components and projects.
3. Asterisk.org: Digium overhauled the community site with new content and new points of access to help partners, customers and developers more easily find key information about Asterisk.
Below is a clip of Mark Spencer thoughts of each of these new offerings
snom first with TR-069 standard for VoIP management
snom technology AG has become the first company to enable the auto configuration of VoIP terminals using the International Broadband Forum’s TR-069 standard.
The new standard allows various devices to contact auto-configuration servers in order to automatically obtain the latest updates and security settings.
It allows organisations using snom phones to customise an unlimited number of extensions for free, and reduces the cost of centrally managing and automatically configuring large VoIP telephone systems.
Oliver Wittig, Vice President of Sales EMEA for snom technology AG said: “As a trusted manufacturer of secure IP phones we were keen to simplify the management of very large phone systems, and use the TR-069 standard to enable automatic configuration.”
snom recently announced a partnership with Jazinga Inc, which allows snom’s VoIP phones to be used with Jazinga’s MGA120 IP PBX appliance.
The partnership makes it easier for SMBs to deploy VoIP systems and benefit from reduced telephony costs.
Interconnect rate debate – winners & losers
The interconnect rate debate continues with government claiming rates will come down by end of the year. But could governments recent vigor to resolve this problem have less to do with the interests of the consumer and more to do with concerns about governments own coffers?
In a recent article on myBroadband it was highlighted that Telkom is a loser in the current state of affairs as they pay out more to other operators than they receive due to the higher mobile interconnect rate versus the fixed line interconnect rate. So obviously with governments interests in Telkom, and recent sale of Vodacom shares, they may be concerned with who is losing out most here.
A slightly cynical view but definately supported by the facts. Below are the net gains and losses of South Africans three largest telecoms operators
The Polycom VVX-1500 Business Media Phone
Lets get to the point… this is one seriously expensive deskphone…. we talking big mula with a current retail price of over R10000! I guess its not fair to compare it with other other IP deskphones because as the name suggests its a full media phone incorporating video, large high resolution 7” TFT LCD, presence and high definition voice quality.
This vid below might give you an indication of who the market is for this product… yup, the slightly balding Amercian executive with the ‘corner’ office and ergonomic chair. Looks like a great phone with awesome features but hardly a market for such a product in SA and not just because of the price point, bandwidth constraints and no support from local ITSP’s are other limiting factors.
How Skype Plans to Dominate Business Telephony
Interesting article featured recently on Gigaom blog on Skypes plans for domination in the business telephony arena, starting with the recent announcement of Skype for SIP beta programme.
Skype, a division of eBay is likely to announce tomorrow that the beta version of its Skype for SIP offering will interoperate with Cisco Systems’s Unified Communications 500 system. This follows closely similar arrangements struck up by Skype with Shoretel and SIPfoundry’s sipXecs platform. In addition, the company is said to be working with Avaya, a major enterprise telephony equipment provider. These are a few of the many moves made by Skype to expand its business to the corporate market.
Skype for SIP was announced in March 2009 and was criticized by competitors and others for being mostly vaporware and an ill-conveived product. Skype, of course feels otherwise. ”There are a lot of companies that are looking for paid and supported version of Skype,” said CEO Josh Silverman, in a conversation last week. “People are using it for in-enterprise video calling.” The company is working on developing an enterprise version and a enterprise license, Silverman explained.
“We are pretty big on video calling,” Silverman said. The company is putting a lot of resources into building better video conferencing experience, because he believes that person-to-person video calling is going to be as big as video. That absolutely makes sense because today the definition of communication is constantly changing. In the past, the world was all about voice, then instant messages and now video calling. People are sending messages and status updates via Twitter and Facebook. The communications are now multimodal.
While he wouldn’t get into product specifics, Silverman dropped enough hints about Skype’s enterprise future. “We are working to develop an enterprise software product that is built around productivity versus simply cost savings,” he said. This is a very telling statement: at present Skype is only utility is that it is a cheap calling service that can leverage about 480 million subscribers and its ability to buy long distance minutes on the cheap.
One of the reasons why Skype is popular with corporate users is because it is fairly easy to use. It is simple to do face-to-face video calls for free via Skype. As a company, The GigaOM Networks uses Skype to essentially conduct most of our business with members of our team who are in remote locations.
Related: Last week, I had a lengthy conversation with Skye CEO Josh Silverman about his plans for the Skype in the coming years. In the first part of the conversation, Josh discussed his lobbying efforts to get Skype working over 3G networks.
Why no virtual VoIP numbers in Africa?
Seems to be a severe shortage of virtual VoIP DID numbers available for African countries outside of South Africa. Obviously legislation and infrastructure are major constraints restricting this service but surely with recent improvements in both these areas the service should be available soon?
Skype recently announced the availability of DID Skype-In numbers for South Africa, but Skype along with most other VoIP providers don’t offer a virtual number for any other African country. On a recent trawl through google search results only one company, mydivert.com, was found to offer a virtual number for Nairobi Kenya however the service claimed to only work within Kenya and could not be dialled from outside the country… mmh, sounds a little dodgy! Further searching revealed availability of virtual numbers in Botswana but thats where it ends.
So of the 47 countries in Africa only 3-4 countries seems to be able to offer local VoIP DID numbers. This paints a pretty bleak picture of telecoms in Africa and the obvious reluctance for the national telco’s to work with alternative providers.
One would think the easiest way for an international company to look at new markets in Africa would be in a virtual sense but it seems this approach would have limited success until the technology in African countries catches up with the rest of the world.
Skype for SIP Beta
Skype has announced Skype for SIP Beta, a service that allows you to connect your existing standards-based (SIP) communications infrastructure to the Skype community and, at the same time, take advantage of Skype’s competitive global calling rates. Shoretel has become the first IP PBX vendor to be approved by Skype, with Shoretel customers entitled to register for the beta version of Skype for SIP.
Skype for SIP is a simplified version of Skype Asterisk that allows businesses and employees to receive inbound calls through SIP-enabled UC systems from its 400 million-plus users. ShoreTel customers can also use the product to direct outbound calls from devices on ShoreTel’s UC system to landlines and mobile phones at Skype rates. Both SIP products are an effort to build on Skype’s presence in the enterprise, where the company’s success has so far been limited.
Ultimately, one could put Skype for SIP to work in many ways;
* With click-to-call buttons customers can contact you directly from your site or email.
* Customers can call you on a local online number.
* Your business will have a presence within the community of over 440 million registered Skype users.
* Free Skype calls to the office when travelling.
* Business as usual for home workers – the office is one click away.
* Your business will be globally accessible and visible to the Skype community and potential partners.
* Improve long distance business relationships with free inbound calling.
ICASA: Empty promises or a step in the right direction?
Following the release of our recent article on the Interconnect Rate Debate, The Independent Communications Authority of SA (ICASA) has today issued a statement on interconnect rates after a meeting between ICASA, Vodacom, MTN, Cell C, Telkom, Neotel and the Internet Service Providers Association. “The meeting was necessitated by the ongoing public discussions around the cost of call termination in the country,” ICASA said in a statement.
According to ICASA the meeting resolved to:
1. Embark on the industry led process to reduce termination rates, with ICASA exercising an oversight responsibility
2. Ensure that the process of negotiating a new termination rate regime also takes into account the requirements of the competition law
3. Conclude negotiations between the operators by the end of December 2009, with ICASA proposing an implementation date of 01 February 2010
So its seems like the mounting public pressure has at least got the ball rolling, lets hope ICASA helps the ball along rather than kicking it aside! If ICASA can reduce interconnect costs by early next year it promises some good prospects for general telecoms costs in SA and opportunities for real competition by VoIP providers. To find out more about the implications for VoIP of a drop in the interconnect rates read here
The Interconnect Rate Debate
There has been a huge amount of debate in the media recently about the exhorbitant interconnect rates charged by cell providers and the impact on mobile call costs in South Africa. What exactly does this mean and what are the implications for VoIP in SA should interconnect rates come down?
What are interconnect rates?
Interconnect or termination rates are the charges that one provider charges another for carrying traffic on their network. For example when a MTN user calls a Vodacom user, there is ‘cost’ to Vodacom for carrying the second part of the call to their user. The charge is based on an agreed rate between cell providers on what the associated ‘cost’ is for carrying that traffic. The contentious issue is whether the cell providers claimed cost is accurate or not.
The issue
GSM cellular licences were granted to Vodacom and MTN on 30 September 1993. At this time there were about 2m GSM users in the world, today there are nearly 4bn users worldwide and nearly 40m users in SA. So an interconnect cost worked out in 1993 when cell user estimates were very conservative, compared to the reality today, paints a very biased picture in terms of the interconnect ‘cost’ which has barely changed in this time. The current interconnect rate is R1.25 p/min with little incentive for cell providers to reduce this ‘cost’ and there seems to be no pressure being exerted by ICASA to force any change.
Where to next?
Significant pressure has started to be put on ICASA and government to reduce these interconnect charges in order to increase competition and reduce telecommunication costs. Leading the challenge seems to be local ITSP’s or VoIP Providers who stand to benefit most from reduced interconnect rates as it makes them a real alternative to the incumbant operators. ECN Telecom has been one of the VoIP Providers to lead the charge and has been very outspoken in the media claiming that the true interconnect cost should be somewhere around 25c p/min.
Implications for VoIP termination in SA
Currently the cheapest way for a business to make mobile calls is by using a LCR (least cost router) onsite which terminates calls directly to the GSM operators. There is an industry focussed on offering these traditional LCR services such as Vox Orion, Huge Telecom, Nashua Mobile etc. Should the interconnnect rates eventually drop to the levels suggested above, it would mean that LCR would no longer happen on a customer site but traffic would rather be routed to a VoIP provider who could terminate the call more cost effectively. Any IP enabled PBX could be set up to route calls to a VoIP provider (or multiple providers), alternatively an IP gateway could be used if a PBX is not IP enabled.
Conclusion
The battle may have only just begun but it is inevitable that with mounting pressure interconnect rates will have to come down at some point in South Africa. At this stage the timing or extend of this change is anyone’s guess (including ICASA’s it seems!). It is however certain that when these rates do come down it will enable real competition in the telecoms landscape and make VoIP termination a very appealing alternative for businesses in SA!
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- The new snom M9 review, some nice new upgrades and feature additions http://www.voipblog.co.za/2009/11/the-new-snom-m9-cordless-ip-phone/
- Cheeky move by SA's biggest operators... the interconnect rate debate continues http://tinyurl.com/yjtxfem
- Astricon 2009 announcements and interview with Mark Spencer, CTO Digium http://tinyurl.com/yfqmj5w
- snom now supports TR-069 standard for remote VoIP device management http://tinyurl.com/ygu2g7x
- ICASA: Empty promises or a step in the right direction? http://tinyurl.com/nqnja2