The mobile network operators are on notice. Dimension Data's subsidiary Internet Solutions (IS) is coming up with a service that will result in it competing directly with the likes of MTN, Vodacom and Cell C.
IS is no novice when it comes to taking on telecom heavyweights. It has established a sizable national telecom infrastructure that competes with Telkom and now wants to use it to offer mobile services too.
IS will offer a voice over Internet protocol (VoIP) - an IP-based telephone service - through its own WiFi hotspots for mobile phones. The system will route calls via the least expensive route, not using the expensive mobile network operators. Essentially, the hotspots will act as cellphone towers for mobile devices. "We have about 600 hotspots in SA, and will also build them in corporate offices where required," says Greg Hatfield, IS GM for voice solutions.
Greg Hatfield
The service is still in the testing phase and will only be offered commercially early next year. IS wants to make the experience as hassle free as possible. To use the service an application that runs in the background has to be downloaded onto a handset. This application will enable users to make calls just like a normal call without the need to log on, launch the application, change their phone numbers or require that they go through any other hassles to use the service. "The users won't even know they are using it," says Hatfield.
He says making the service problem free is one of the biggest challenges. However, the large array of phones has meant designing a programme that can be used by all makes of phone is no easy task and this is why IS is doing extensive testing. If IS does get it right, the savings for end-users could be huge.
IS gains by getting into the lucrative mobile voice market that generates billions of rand in revenue every year in SA.
Besides going into the mobile market, the fixed line penetration of VoIP is still quite low, even after it was introduced to SA a good few years ago. "It's still in its infancy. I would say it has less than 15% of the market," says Hatfield.
SA's largest corporations have embraced VoIP, but the business community as a whole has not yet woken up to it. VoIP's slice of the market might not be very large but as a concept it has reached maturity, with the methodology and equipment behind it having long proven they work.
The public sector is also starting to adopt VoIP - IS has signed a number of local, provincial and national government departments onto the service.
WHAT IT MEANS
 Already has 600 hotspots around SA
Prepared to build more for corporate offices
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Offering VoIP and least-cost routing is no challenge for IS, as it is one of the largest providers of this kind of service in SA. But offering these services was only possible after the changes to the regulatory dispensation that came into effect in early 2005. These changes, Hatfield says, evened the playing fields by not only permitting IS to compete with the incumbent telcos in the voice market, but by providing an entitlement to wholesale pricing through direct interconnects with other carriers. The effect of these regulations has seen pricing drop by up to 50% for those customers that have chosen the VoIP option.
But offering fixed and mobile VoIP services is not the end of the innovative offerings IS has. It also offers to take over the management of a business's phones, cost management reporting and the corporate PABX via a virtual PABX offering.
The industry is starting to open up. Besides more liberal regulations, the landing of the new undersea telecom cable, Seacom, is set to shake up the industry. Expect big changes.
