Incumbent market share under attack
Major new players in the telco sector are confident that they can steal significant market share from the incumbent GSM and fixed line providers as the South African telecoms landscape continues to change at a rapid pace.
This was the sentiment evident in presentations by telecoms experts, Douglas Reed (Group MD of Vox Telecom), Rob Lith (Director of Connection Telecom), Wayne Speechly (GM of Voice Solutions at IS) and Steve Song (Shuttleworth Foundation fellow) at the inaugural VoiceSA conference held earlier this month.
Embrace Change
Douglas Reed, Group MD of Vox Telecom, encouraged others to embrace change in order to take advantage of the opportunities presenting themselves: “There are more opportunities for alternative providers now than ever before. The market is highly unpredictable, and the incumbents are slow to adjust.”
He added: “The general trend of IT is towards putting the power back in the hands of the consumer. The traditional providers will be less able to lock in customers, and customer loyalty will be difficult to achieve.”
Technology trends
Cloud Computing was cited by Rob Lith, Director of Connection Telecom, as catalyst for growth: “VoIP providers currently only account for 10% of telco industry spend. Cloud computing is a driving force that will shake up the hosted telephony market, as more companies become more comfortable with this technology paradigm.”
Wayne Speechly, GM of Voice Solutions at IS, added: “Historically, VoIP has earned a bad reputation for sub-standard call quality. This is now a thing of the past, with technologies like HD Voice and Video calling beginning to gain traction and show their true potential.”
GSM as a target sector
Lith expanded on his recommended strategy for alternative telcos: “With as much as 60% of telco market currently controlled by GSM operators, this sector is of particular interest to the alternative telcos.”
Speechly reiterated the point, commenting on the impact of fixed-mobile convergence: “The costs associated with the monopolies run by the major mobile operators will be circumvented by VOIP over WiFi technologies and fixed-mobile converged networks. This is already happening.”
Steve Song outlined his vision of the ‘Village Telco’ – a localized, low cost, self installed network built on WiFi technology that can be used in communities where communication need not cover larger distances. “In Africa, among the bottom 75% of earners, approximately 50% of disposable income is spent on mobile services. Using a simple, low cost device, communities can build their own networks to significantly reduce the cost of telecommunications. Localized GSM traffic is as high as 60% in some instances – this could all be potentially accounted for by self built networks in the future.”
Adrian Bush, Managing Director of Even Flow Distribution, commented: “VoiceSA presented a platform for open discussion and valuable insight into the regulatory and technology changes in the industry, as well as how alternative telcos plan on competing in this landscape against the larger established operators.“
VoiceSA is an annual event presented by Even Flow Distribution, which aims to bring together the disparate groups within the telecoms industry to ensure a positive future for the South African industry.
