By Duncan McLeod
John Holdsworth, the businessman who took on the mobile operators over high wholesale call charges and won, has launched a new business that will take advantage of falling prices and faster mobile data networks. He hopes, in the process, to shake up the mobile telecommunications industry in SA.
Holdsworth, a feisty Englishman who founded ECN Telecommunications, which he sold to JSE-listed Reunert last year for R172m, has his fair share of admirers and detractors in SA’s telecoms industry.
The big operators tend not to like him because he’s constantly criticising them for behaving like a cartel. But some of the industry’s smaller players like him for having the guts to take on the sector’s biggest players.
That was certainly the case when he challenged the high rates incumbent mobile operators charged each other and other players to carry calls on their networks. They’ll say otherwise, but there’s little doubt operators used the rates as an anticompetitive club to keep new competitors at bay.
The high charges — R1,25/minute in peak times until a couple of years ago, when Holdsworth started agitating for lower fees — will fall to just 40c/minute by March 2013. The Independent Communications Authority of SA has hinted it may seek to reduce them even further after 2013.
Holdsworth was not alone in lobbying for the reduced rates, but he was the public face of the campaign. He petitioned politicians, getting people such as former Independent Democrats leader Patricia de Lille and ex-communications director-general Mamodupi Mohlala (now the national consumer commissioner) to take on the cause of lowered rates.
After a period of silence due to a restraint of trade with Reunert, Holdsworth is plotting his next move in the telecoms industry and looks set, through his new company, AppChat, to get the big mobile players hot under the collar all over again.
TechCentral broke the news on Friday that AppChat will launch a mobile virtual network operator (MVNO) this year — he’s not saying yet which network operator it has partnered with — that plans to take advantage of lower interconnection rates and advances in broadband wireless technology to slash the cost of mobile telephony in SA.
Unlike SA’s other MVNO, Virgin Mobile, AppChat is also building some of its own network infrastructure, including a core Internet protocol network with points of presence in Gauteng, Cape Town and Durban.
AppChat is developing an application for smartphones running Google’s Android, Apple’s iOS, Microsoft’s Windows Phone and RIM’s BlackBerry OS that will “intelligently” route calls over its mobile partner’s broadband data network where third-generation (3G) network coverage is good. Where it’s not, calls will be routed over 2G GSM.
Developing this sort of technology is not easy — and Holdsworth’s team is going to have to be smart about how it handles quality-of-service issues — but placing voice-over-data mobile calls is usually cheaper than making a traditional mobile phone call.
AppChat wants to take advantage of this and slash the cost of mobile telephony. Users will not be billed for the data they use to make the call, only the call’s advertised per-second tariff.
It’s even promising to offer better quality voice over broadband than what’s offered over traditional mobile voice networks. With networks deploying speedier 3G technology, it’s an idea whose time may have come.
AppChat, which is modelled after successful Danish MVNO Telmore, plans to launch commercial services in October.
Holdsworth is promising a low, uniform voice tariff that applies to all calls, whether they’re made during the day or late on a Sunday night. If he gets the model right, the big operators may find him even more of a thorn in their side than before.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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