VoIP specialist, Clear Voice, which recently became a Tier One provider by gaining an Individual Electronics Communications Network Services (IECNS) license from The Independent Communications Authority of South Africa (Icasa), is expecting revenue to increase by 50% for the 2011 calendar year.
The company was also announced as ECN’s top reseller earlier this year. ECN is a major player in the delivery of affordable and accessible converged voice and data solutions.
Said Felicity Menge, MD of Clear Voice: “There has been a lot of consolidation in the VoIP and least cost routing (LCR) markets during the past year, especially as the LCR market has come under strain since the interconnect rate was decreased. Indeed,” said Menge, “a number of companies who derive the bulk of their revenue from LCR are in serious trouble. If turnaround plans cannot be timeously devised, a number face bankruptcy.
“However, since we have moved into the tier one domain we have been able to grow our business and offer our clients better rates, despite the turbulent economic times and the pressures on margins in this industry. We now have offices in Cape Town and Pretoria – and provide services to a total of 60 resellers, who now occupy the market space we did prior to Clear Voice becoming a Tier One player.
“The market, however, is not going to be won on price alone. Besides cutting our rates twice this year we are committed to offering our clientele a high level of service, including the provision of sustained quality calls.”
A number of listed companies, including the Huge Group and Vox Telecom have been bemoaning the state of the LCR market as the sector has been under severe strain since the interconnect rate was cut by Icasa. Last year Vox was forced to impair R745 million in goodwill and intangible assets related to its acquisition of LCR specialist Orion Telecom. Since then Vox Telecom has been working to convert its LCR clients onto its own network to offset what it believes is the looming decimation of LCR.
The LCR market was thrown into disarray when Icasa cut whole call termination rates – the fees the operators charge each other to carry calls onto their networks. Icasa reduced mobile termination rates to 73c/minute in March 2011, with further cuts on the cards for 201 and 2013, taking the rate to just 40c/minute.
“We are seeing a lot of red being penciled into balance sheets in the industry,” said Menge. “But we have seen our market grow significantly during the course of the year and expect a revenue increase of 50% for the 2011 calendar year.”