The Electronic Communications Act (ECA) will be key in the growth of Voice over IP (VoIP) in South Africa. However, its full impact may not be felt until all relevant legacy license conversions have been completed – which may take up to two more years.

This is according to Michael Kuczmierczyk, product development manager at Sentech, who says that the Act resolves many issues surrounding licensing and related limitations such as infrastructure self-provisioning and spectrum allocation by introducing a number of licenses which will be awarded to companies playing in the information and telecommunications space.
"The uptake of VoIP has been nowhere near its potential. For the most part, VoIP is currently being used primarily to reduce call costs by routing internal company calls via their data infrastructure," he says.
Though the ECA does touch on some critical aspects affecting VoIP, such as interconnection some important components remain unclear. The way that interconnection pricing principles will be regulated will be a key factor in the level of potential achieved by VoIP in SA. While it is possible to provide inter-branch services and community calling (one company making a VoIP call to another company on their service provider's network), it is the interconnection tariff on to Telkom and the cellular networks' that is a key inhibitor to VoIP providers nationally, as well as the cost of international access circuits.
In fact, Kuczmierczyk says it is cheaper for a VoIP provider to route calls through an interconnection agreement with an international telecommunications provider back into South Africa than it is to interconnect directly with the incumbent operators.
"While the ECA may help change this by regulating interconnection tariffs, a concern is that the process of establishing interconnection agreements may not be regulated, which could complicate the establishment of interconnection agreements," he says.
Sentech is developing services across three broad areas. Firstly, the provisioning of wholesale service allowing VoIP providers to interconnect through Sentech. Secondly, Sentech will offer its own converged business and consumer solutions with guaranteed quality of service. Ultimately it will provide solutions to the market through its extensive partner network.
Kuczmierczyk says Sentech is currently developing its strategy to position itself to provide quality converged solutions incorporating voice, data and value-added services.
"Unlike Internet telephony, true VoIP is not a best effort service. Sentech's VoIP service will be a managed one with guaranteed service levels. Sentech's voice strategy will also take into account a host of value proposition factors as opposed to centring its strategy on only reducing per second call costs," he says.
The bigger picture needs to be examined, including understanding that VoIP reduces the need for two networks (data and voice) and creates a converged environment that requires less administration but offers more opportunity and enhances productivity.
"The extended benefits of convergence are what are going to really impact the market, says Kuczmierczyk. "We're therefore going to see a lot more from VoIP than just the reduction in call costs which have been seen to date," he adds.