Transcript The future of voice in Africa

The future of voice in
Africa
Russell Southwood, CEO, Balancing Act
http://www.balancingact-africa.com
[email protected]
Grey markets as surrogate
competition
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Whatever view of grey market it provides competition
Price arbitrage
Considerable size: Lesotho (17%); Sierra Leone
(47%); Cameroon (30%); Average: 20-30%
Fall in retail calling charges:
2005: 47 out of 54 countries US$1 a minute or over.
2006 19 countries charging US$1. 27 charging
between US25-99 cents. 6 countries charging below
US25 cents a minute
If legal, arbitrage shifts from international to national
From no-go area to
legalisation
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Originally viewed as a criminal technology that
challenged the existing order
Noisy advocacy by ISPs. Use of fibre networks by
newer carriers
Incumbents deploy international VoIP gateways.
Tipping point 2004. No longer sustainable to protect
existing interests.
Ernest Ndukwe, Executive Vice Chairman of the
Nigerian Communications Commission (NCC): VoIP
“the engine that will drive telephony in developing
countries”.
What is legal VoIP?
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The number of international gateways for both
voice and data
The existence of niche VoIP service operators
The existence of workable and equitable
interconnect agreements
Longer-term: VoIP peering agreements
Legal in 7 out of 54: Algeria, Kenya, Mauritius,
Somalia, South Africa, Tanzania and Uganda.
Anomalies elsewhere.
Legal everywhere in five years or less
Changes in market structure
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Layered network model: VoIP in the service and
apps layer
Intro of IP has uncoupled services from
transport and infrastructure
New VoIP service providers “rent” the network
like other operators through interconnect. From
a small number of big players to big players plus
many smaller players. Growth of local SMEs,
owned and funded locally
The birth of the African VoIP
service provider
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Living in the margin between wholesale and
retail. Pressures to squeeze them out of
existence. Got be more than a “briefcase”
business
Delivering more cheaply in local loop. Seeking
to gain some control over its revenues.
Increasing number of companies trading
horizontally between each other.
Transition to IP networks
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Goes through four levels: international,
national, local loop, user
25% of incumbents have intl gateway and IP
connections in all African countries
National trunking: About 20 carriers already
doing. Further 10 in next 12 months.
Local loop: Laying the groundwork. MTN testing
Wi-MAX. IP-enabled Abis.
User level: Cost of handset issues
VoIP Futures
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VoIP peering
eNUM
Mobile VoIP
Thank You
Russell Southwood
CEO
Balancing Act
http://www.balancingact-africa.com
[email protected]