The Interconnect playing field

1 March 2010 is a significant date in the history of South African telecommunications. On this date, the interconnect to mobile operators will come down. For consumers the end result should be lower call charges one day down the line.

For current and potential voice service providers the impact is immediate. The mobile operators have already jumped into high alert mode - as they need to protect existing [eroding] revenues. The end result for the customer will be a good one here, as mobile operators will be forced to innovate more aggressively in order to keep or win customer votes.

For alternative voice service providers this is excellent news!!!

The playing field as it is known in South Africa is in the process of being re-drawn and so too are the rules.

Historically the voice market consisted of a small group of operators, which then appointed a small number of "Service Providers", which then in turn appointed resellers, which then in turn appointed dealers, and so it went on...

As it normally works in such a hierarchical system, the people doing the most work are not the people higher up in the system. The lower down you are, the less you qualify for OR the more you have to work in order to make something meaningful out of the opportunity.

That has now all CHANGED !!!

Anybody is now free to apply to ICASA for a license, or to partner with an entity with an existing license.

Here is the first difference already; Instead of a small handful of Service Providers, there are over 300 ICASA license holders.

If you have the correct license, you are then entitled to interconnect with other licensed operators in South Africa, the "big" ones included.

This is fantastic news for everybody wanting to enter the Telco playing field.

The traditional GSM LCR segment in South Africa was a R6 Billion industry - and that was purely providing an existing service at a lower cost; no innovation or new services that really addressed business needs.

You will now be able to build your own infrastructure by interconnecting with other operators, coming up with innovative customer offerings and offer the market something unique and competitive.

On this note I'd like to add, that in order to be unique and competitive does not mean you have to compete on price purely !!! It is a common misconception that because it's IP voice it has to be cheap or free. After 5 years of playing the commodity game, customers understand that SERVICE can play as big a part of a decision as price does.

The aim of this blog is to provide information to current and potential voice service providers on how to go about staking your claim on the Telco playing field. We will try and highlight common mistakes to avoid and also equip you with knowledge and insight so that you can build a successful business.

I hope you enjoy the journey with us....we look forward to interacting with you on a regular basis.