Uncertainty in SA’s telecommunications industry has played havoc with product and network planning, says research firm BMI-TechKnowledge (BMI-T).
BMI-T director Brian Neilson says mobile termination rates and the regulatory environment have been the primary drivers of uncertainty in the market.
Termination rates are the fees the operators charge each other to carry calls onto their networks. They have already been cut once this year, and the Independent Communications Authority of SA (Icasa) wanted another cut not long after.
High termination rates, especially those charged by mobile operators, have been blamed for keeping retail tariffs higher than they might otherwise be and for acting as a barrier keeping new rivals from emerging.
The regulations governing those rates have been challenged and another cut has not been implemented.
“The regulatory environment is really uncertain and we don’t know when or how fast things at the regulator will happen. One thing we can be sure of is that rates will come down,” says Neilson.
However, he says BMI-T expects the next rate cut to happen only at around this time next year.
Least-cost routing operators and alternative voice players have been hardest hit by the uncertainty and by the decrease in rates. He says most of the alternative players have to rethink their business models on a monthly basis.
With dramatic changes expected in mobile termination rates, Neilson says traditional least-cost routing providers are coming under severe pressure.
“These alternative players are having to find a new space in the market,” he says.
Neilson says that already, local players are actively migrating away from the traditional model of least-cost routing to hybrid voice-over-IP solutions.
“They need time to ramp up their business models. Even then there is no guarantee that they can survive,” he says. — Candice Jones, TechCentral