TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      Fixing SA’s power crisis is not complex: it simply takes the will to do better

      12 August 2022

      Consortium makes unsolicited bid for state’s 40% stake in Telkom

      12 August 2022

      Actually, solar users should pay more to access the grid – here’s why

      12 August 2022

      Telkom says MTN talks remain on track

      12 August 2022

      Analysis | Rain muddies the waters with approach to Telkom

      11 August 2022
    • World

      Tencent woes mount, even after $560-billion selloff

      12 August 2022

      Huawei just booked its first sales rise since US blacklisting

      12 August 2022

      Apple remains upbeat about iPhone sales even as Android world suffers

      12 August 2022

      Ether at two-month high as upgrade to blockchain passes major test

      12 August 2022

      Gaming industry’s fortunes fade as pandemic ends

      11 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Opinion»Mobiles risk becoming networks of last resort

    Mobiles risk becoming networks of last resort

    Opinion By Rob Lith27 March 2014
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Rob-Lith-180Recent events are evidence of unprecedented pressure on mobile network operators to lower their prices. Yet a sober analysis reveals that the networks are really their own worst enemies, and can turn their fortunes around by simply lowering prices.

    The latest proposed cuts in the mobile termination (interconnection) rates are the most obvious threat to the mobile operators, because it comes from official circles. In response, Vodacom and MTN have joined court action against Icasa, the regulator, to stop the lower rates becoming reality.

    Meanwhile, another threat looms. As a recent TechCentral column by Marius Burger of Indian Atlantic Telecoms points out, “over the top” (OTT) providers such as Skype are pricing mobile operators out of the market with low-cost calls over rent-free Internet protocol networks.

    But it goes even further than that. Wi-Fi networks are becoming increasingly ubiquitous, with several high-profile rollouts under way, including MWeb’s Home ADSL hotspot initiative. Cellular data rates are as high as voice rates, leaving cellular in danger of becoming a network of last resort.

    If that’s not threat enough, a range of global technology developments threaten to wrest control over mobile communications away from the operators. Carrier-agnostic Sim cards, for one, could, in time, allow deep-pocketed hardware makers like Apple to buy bulk minutes and bandwidth from global operators, decoupling communications from specific providers (and freeing consumers from restrictive contracts). With one number, they could travel anywhere and use the best local network, thereby avoiding roaming rates. Already, the Netherlands is allowing this.

    All these developments spell trouble for the networks, but in truth they are merely market reactions to the mobile operators’ unfair pricing practices. The operators have charged inflated voice rates for a long time, and the market, regulator and government agree it is unsustainable.

    In the circumstances, the proper course of action is not to turn a blind eye to new competition, take the regulator to court or engage in a brand-damaging public spat between peers, all in the interests of defending excessive charges.

    There is a way out. In short, they must charge less — much less — and do so willingly and quickly. This would give cellular unprecedented appeal, and the volumes alone will take care of the rest.

    Not convinced? Consider how mobile pricing has already driven consumers into the arms of OTT providers. If given the choice, these consumers would like the best of both worlds: great rates offered by IP and the fantastic network coverage and quality offered by cellular networks.

    It remains to be seen if the networks will suddenly change tack. They certainly seem prepared to go on the defensive with vociferous media campaigns and court cases.

    Meanwhile, the usual protectionist tactics continue unabated. Sim lock-in remains a tactic of choice, and operators have hinted at charging more for “voice data” sent over their IP networks than “data data”.

    cell-tower-640

    But change — sooner rather than later — is advisable. Why bother to defend progressively slimmer margins while risking long-term market alienation? It is infinitely better to change course now, protect future profits and become an attractive option to consumers.

    Evidence of this elevated mind set can already be found in the industry. Alan Knott-Craig, CEO of Cell C and previously of Vodacom, has made the visionary statement that mobile operators must focus on providing the best pipes in the business, at rates that don’t make you blanch, and traffic will naturally gravitate to it.

    All providers that connect their subscribers with others pay an interconnect rate. If the cellular networks accept lower termination rates, OTT and other voice-over-Internet protocol providers are more likely to actively develop and promote their services over mobile termination applications.

    The alternative is a large-scale migration from cellular networks.

    • Rob Lith is director of Connection Telecom
    Alan Knott-Craig Cell C Connection Telecom Icasa Indian Atlantic Telecoms Marius Burger Rob Lith Vodacom
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleCarrim welcomes Usaasa probe
    Next Article Pule will not return to parliament

    Related Posts

    Analysis | Rain muddies the waters with approach to Telkom

    11 August 2022

    Largest SA telecoms operators launch new industry association

    11 August 2022

    Willington Ngwepe to step down as Icasa CEO

    10 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    Get your brand in front of TechCentral’s amazing audience

    12 August 2022

    Pricing Beyond CMYK: printers answer the FAQs

    11 August 2022

    How secure is your cloud?

    10 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.