Telkom customers score

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 16 Feb 2010 Telkom is to reduce its fixed-to-mobile call rates from 1 March by 36c, from R1.65 to R1.29, per minute, which is about a 22% reduction.

In a letter presented to the Parliamentary Portfolio Committee (PPC) on Communications today, Telkom group executive for regulatory affairs Andrew Barendse wrote that these new rates have already been agreed to with MTN and Vodacom. He said the new tariffs are waiting for finalisation with Cell C and the regulator's approval of Telkom's tariffs.

“In support of the PPC's initiative and government's call to reduce the cost of communications, Telkom will, therefore, put approximately R1.3 billion back in the pocket of Telkom's customers. Telkom trusts that the PPC will find this in order,” Barendse's letter says.

Barendse wrote that, although not legally obliged, Telkom has decided to give a 100% pass through on the reduction of mobile termination rates (MTRs) to Telkom's retail customers for fixed-to-mobile calls.

“Telkom has, in the interim and in anticipation of the successful interconnection negotiations, also filed fixed-to-mobile retail rates with ICASA,” he added.

After reading the contents of the letter to members of Parliament, communications committee chairman Ismail Vadi said he welcomed the news. He indicated that Telkom would be invited to present before the committee on interconnection rates and other issues at a date still to be set.

The committee is currently questioning ICASA on its plans to reduce MTRs significantly by the end of June.

ICASA approves InterConnect charges

It’s official! The Independent Communications Authority of SA (Icasa) has approved revised applications from Vodacom, MTN and Cell C: mobile interconnection rates, the fees they charge each other and other operators to carry calls on their networks, will fall from R1,25/minute to 89c/minute in peak times on 1 March.

Off-peak rates will remain unchanged at 77c/minute.

Read more at http://www.techcentral.co.za/its-official-icasa-approves-cellphone-fee-cut/12741/

Cape Town
Feb 2010

DataRoom enables all roles players to manage telecoms costs

DataRoom is a Cape Town based company that focuses on enabling cost effective telecoms expense management. Our knowledge and skillset has been built up over 10 years,

DataRoom go to market using a variety of business partners for distribution; including service providers, dealer channels and direct relationships with clients.

DataRoom's vision is to master voice expenditure across all suppliers and all products. Our strategy is to ensure that all role players gain access to our knowledge base. These roles players include suppliers, consultants, service providers, hardware vendors and management in a business.

DataRoom delivers our value proposition using a single intelligent view into all telecoms expenditure; along with a documented methodology, best practice standards and account managers.

The solution enables the efficient management of telecoms costs; whilst driving down resource requirements, maintaining savings and ensuring that our clients always have the facts and knowledge to ensure best of breed telecommunications at all times.

Call DataRoom for further information on 0861 66111 or email sales@dataroom.co.za.

Peter Walsh is a founding shareholder and sales director for DataRoom

Cape Town
Feb 2010

Gartner Says 80 Percent of Enterprises Will Overspend on Their Wireless Service Costs Through 2014

Gartner Outlines Four Areas of Focus to Better Manage Enterprise Wireless Costs
STAMFORD, Conn., July 22, 2009 —

Eighty percent of enterprises will overspend on their wireless service costs by an average of 15 percent through 2014, according to Gartner, Inc. Gartner analysts said that as mobility has grown among enterprises, costs have also grown, and companies need to become better at managing their mobile voice and data costs.

“Our research shows that the majority of companies are not adequately managing their mobile users or services,” said Phil Redman, research vice president at Gartner. “They need to look more closely at their key user segments and requirements in order to match those needs with the right services and optimize their spending.”

Mr. Redman said that during the next year, companies should look to four main areas to manage their wireless costs:

Contracts
How enterprises buy services has changed in the past few years and more than 60 percent of midsize and large companies have moved away from buying individual plans, which are the least efficient in reducing costs. However, newer services, such as pooling plans, flat-rate plans, and zero–minute phones all need to be carefully evaluated to ensure that they are offering maximum value across the organization. Gartner also advises companies to move from individual liability plans (where the user is responsible for the payment and contract) to corporate liability plans that allow for better control of costs through the optimization of wireless services and corporate discounting.

International Roaming
International roaming costs become increasingly difficult to manage as companies extend international travel. Through 2010, 10 percent of users that travel internationally will make up 35 percent of the total service costs for companies that support travel. Although there are no "magic" solutions for reducing costs beyond reducing the number of users who travel, reducing the minutes used and making users aware of the costs, companies can negotiate with the carrier for roaming cost reductions and look to adopt mobile roaming plans. International data roaming can be even more costly with some bills reaching thousands of dollars in a short period. Gartner recommends that companies disallow all ad hoc use of international wireless data and instead promote the use of smartphones for e-mail or ask carriers for bundles for remote workers.

Mobility Management
Active management practices are important to organize services and control expenses. According to Gartner, the two main areas to focus on in management are policy — used to eliminate undesirable practices and promote a set or desirable practices and compliance across the organization — and the use of outsourced services, called telecom expense management (TEM), which provides extensive mobility management services to enterprises.

Desktop Replacement
Some companies are already beginning to integrate their cellular phones into their corporate system, which can support cost routing for reduced service calls or the elimination of desk phones. Both are part of fixed mobile convergence (FMC) plans, FMC being the intersection of where fixed and mobile unified communications (UC) meet and share services and functionality. In this scenario, instead of literally being "chained" to their desk, users will have the freedom of conducting business in a mobile environment but maintain enterprise functionality in the wireless device.

Interconnect Rates and our LCR - where to now?

We are inundated with requests for information and guidelines [from our clients and business partners alike] on what to do about the Interconnect Rates and our LCR. Many of our clients are sitting on the sidelines not making decisions because they don’t know what to do and the resulting loss in savings is punitive.

To make matters worse ICASA announced yesterday 1st Feb 2010, that they are not be accepting the proposal from the GSM networks and Interconnect rates are NOT coming down on the 1st March 2010 anymore [well for today this is the status quo anyway].

So what do you do about LCR in today’s telecoms landscape and how should your business be proceeding. Should your business leverage LCR or adopt a wait and see approach?

Here follows some guidelines on how to approach LCR and or any telecoms infrastructure for that matter –

1. Don’t renew any subscription based contracts for GSM LCR
a. There is no law stating that you cannot run month to month and all LCR service providers will allow you to run month to month
b. Subscription based LCR with a 24 month contract period is definitely not the way to go
i. As a minimum you want your business to be paying for calls made
ii. And you don’t want to be managing bundled minutes / SIM cards

2. The reality is that there is more choice in SA now with the arrival of Neotel and the VANS – meaning that Least Cost Routing of all call type’s – not just GSM – is important when it comes to containing teelcoms costs and probably always will be – especially
a. Regional
b. Inter branch - why carry costs on your MPLS if someone else will do it for R 0.15 and guarantee quality of service
i. Local, National and GSM; all these calls can now be routed cost effectively using LCR

3. Whilst price plays a big role in any RFP or procurement process; price alone cannot dictate your procurement strategy for telecoms. Business need should drive procurement strategy and price should play a role – i.e. what is the least cost route for my traffic taking my unique business need into account.
a. Market forces, Legislation and Quality of service [QoS] will dictate the right price for your unique business need
b. Buy in from all roles players on strategy is advisable
c. Ask your trusted suppliers / advisors what they think and what new “innovative” products they have available to you
d. Business needs change and therefore clarity is NB on –
i. Current Business Needs
ii. Future Business Needs

4. Ensure your commercial agreements with Service Providers provides you with a so called “technology catch fence” which is essentially an “out clause” in the contract stating that if the market moves and the service provider cannot match the service you can “get out of “ the contract -
a. This will give you and your management team the comfort levels you require to move forward knowing that if the markets move you are not tied into a long term contract
b. Most SP’s are currently joined at the hip in one way or another and when the market moves they will all move together / although we could see major changes with the new fiber networks and the competitive nature of SA’s telecoms market in 2010.

5. Whilst price is important so is -
a. Quality of service / voice quality
b. Optimised infrastructure – a “must have”.
i. So many businesses put LCR in place and don’t pay attention to the “overcapacity” issue; resulting in increased fixed monthly costs.
• Pay careful attention to Zero Billing assets
• Watch your concurrent calls analysis per site for the signs of overcapacity
• Reduce telecoms infrastructure requirements where possible
c. Service Level Agreements / response times / maintenance costs / roles and responsibility
d. Service Provider “Support Structures” such as customer service desks and operational support / project management
e. Redundancy of infrastructure / continuity of business – especially mission critical call centers / business processes / operational centers

6. The fact that you cannot squeeze SP’s until they have nothing left and then expect great service in return
a. Rather focus on great value and great service
b. There needs to balance
c. That’s why pricing only receives a 25% weighting in RFP’s we have been involved in

7. Critical business processes like – call centers / business processes / operational centers normally require redundancy
a. Redundancy should never be a price motivated decision
b. Rather savings extracted from telecoms initiatives need to pay for redundancy
i. i.e. more value for at a cheaper cost
c. User experience
i. Bad quality – bad experience for customer and employee alike
ii. Bad for business

8. Infrastructure
a. Optimised infrastructure is a “must have”. So many businesses put LCR in place and don’t pay attention to the “overcapacity” issue; resulting in increased fixed monthly costs.
i. Pay careful attention to Zero Billing assets
ii. Watch your concurrent calls analysis per site for the signs of overcapacity
iii. Reduce telecoms infrastructure requirements where possible
b. Watch the rental costs per line / port
c. “Minimum billing” versus managing “subscriptions bundles” and “rented ports “
i. Passes Risk of zero billing issue over to the SP / no longer your problem
ii. If the Service Provider carries only charges for calls and not to rent the port your business can
• drive down fixed costs
• invest in redundant options
• and save money

Waiting for the market to dictate policy and business need is not a good business practice. As a business one needs to have a plan. And DataRoom can help you formulate that plan. So get us involved in the areas where we can help you formulate a way forward and provide that much needed clarity that will enable you to make an informed decision.

There is no easy answer, but should you wish to maintain savings and or increase savings using LCR, there are no short cuts. You need to do the work before you make the call.

These are our thoughts / guidelines rather than rules and if you have any questions please pick up the phone and call us.

Peter Walsh
Cape Town
Feb 2010