AltX-listed Vox Telecom says there is still a good three years of life left in the least-cost routing (LCR) market. This is despite the big cuts in mobile and fixed-line termination rates, the rates that telecommunications providers charge each other to carry calls onto their networks.
Vox CEO Douglas Reed says the fact that until Telkom and the mobile operators have yet to make significant cuts to retail tariffs off the back of lower interconnection, LCR will stay a viable option for alternative providers.
The company presented its results to shareholders and analysts on Wednesday, showing headline earnings down 7% to 2,14c/share and profit down 6% to R24m.
Subsidiary Vox Orion is SA’s largest provider of LCR solutions and is regarded as one of the companies most vulnerable to the cuts in termination rates.
Vox is migrating its customers from LCR services to its own network and the costs and time constraints associated have knocked earnings. However, Reed is confident the business is stable and on track to migrate customers to the new service.
Reed says Vox regards Telkom as its most direct competitor in the fixed voice market. He says its new service Cristal Vox voice-over-Internet Protocol product will help it compete more effectively.
“For Telkom to compete with us on price will be difficult, unless they cut internal costs. With the unions and government behind them it may be more difficult for them to do that. If you think about it, they are our opposition,” he says. — Candice Jones, TechCentral