Cellphone rates to come down: ICASA - Times LIVE

Oct 29, 2010 11:09 AM | By Sapa

Mobile phone companies will have to cut charges for handling calls from other providers, the Independent Communications Authority of SA said on Friday.

Termination to a mobile location from March 1, 2011 to 28 February, 2012 will be 73 cents at peak and 65 cents at off-peak times.

The rates are currently 89 cents and 77 cents respectively.

MWEB cuts local transit links: The peering war begins

Staff Writer MyBroadband | 28 October, 2010

MWEB will today sever their local transit to MTN and Vodacom, with Telkom to follow early next week. Expect a few fireworks in the SA Internet space!

MWEB stunned the local ADSL market in March 2010 when they launched their affordable uncapped services, but at the time MWEB CEO Rudi Jansen said that this was only the beginning of their quest to ‘free the web’ in South Africa.

Jansen explained at the time that free and open peering was essential to help increase competition in the telecoms market which would then drive down the price of bandwidth in the country.

Since March MWEB has launched many new services, including uncapped wireless broadband connections and an uncapped bonded ADSL offering, and has started to push the envelope on free and open peering.

Last week Jansen said that they made a conscious decision that as from next month they will not pay for transit traffic. “So if you don’t want to peer with us, that is it! We will not pay you one single cent anymore,” said Jansen.

Actions speak louder than words

MWEB is making good on their promise a little earlier than expected. The company will sever its local transit with all telecoms operators and ISPs which do not peer with them directly this morning, with Telkom/SAIX to follow early next week.

This move has sent shockwaves through the local ISP market, prompting companies like Hetzner to pro-actively warn their clients that they may experience slow speeds to Hetzner’s hosted servers in SA when sitting on an MWEB connection.

These severed transit routes mean that MWEB will have no local links to or from big players like Vodacom and MTN, necessitating international routing to share traffic.

MWEB ISP CEO Derek Hershaw explained that MWEB will not ‘black hole’ any local ISP’s traffic. “We will simply be rerouting traffic away from congested and very expensive local transit links to our international bandwidth, which is significantly cheaper and not congested,” said Hershaw.

The severed transit routes and links will however not only affect outgoing MWEB traffic – hence from MWEB subscribers trying to access content on MTN or Vodacom’s networks – but also traffic from Vodacom and MTN subscribers trying to get onto the MWEB network.

This means that MTN and Vodacom subscribers who want to read News24, visit DStv Online or read the latest financial news on Fin24 will most likely be routed internationally by Vodacom and MTN.

This in turn will force providers to increase their international capacity to ensure good service levels – an exercise which can become very costly.

Peer for free, says MWEB

There is however another simpler and cheaper solution than routing traffic internationally: Peering with MWEB for free.

Hershaw reiterated that MWEB is very keen to peer with all ISPs free of charge at the Johannesburg Internet Exchange (JINX) and/or the Cape Town Internet Exchange (CINX), and this is what he hopes will happen.

“Hopefully we establish a principal where all ISPs peer on an open basis using the ‘hot potato’ principal - i.e. where you hand the traffic over at the closest point to where it is hosted,” said Hershaw.

Many ISPs are already peering with MWEB at JINX/CINX, including Vox Telecom, Neology and Cybersmart, and there will hence be no impact on them when MWEB cuts their transit links.

It is also understood that Internet Solutions is currently peering with MWEB in a proof-of-concept agreement, significantly limiting the impact of MWEB’s ‘no transit payment’ decision for both companies.

It's give and take with 8ta | ITWeb

Paul Vecchiatto, ITWeb Cape Town correspondent

According to analysis, mobile newcomer 8ta's per-minute billing makes its offerings more expensive.
While Telkom's mobile service, 8ta, is cheaper for landline rates, its prepaid offering is billed per-minute and not per-second, making its more expensive.

This is according to independent telecommunications expense management company DataRoom.

DataRoom, which helps clients manage their telecommunications expenses by examining their itemised billing, used random samples of typical call detail records (CDRs), or itemised bills.

The rates used were as published on the various mobile operators' Web sites last week and do not take into account changes announced by Vodacom this morning.

The research was done in three exercises. The first related to overall call patterns and was an analysis of 1 400 090 minutes from GSM voice contracts, reflecting the following split: 40.16% of talk time minutes terminating to MTN, 40.34% of talk time minutes terminating to Vodacom, 7.15% of talk time minutes terminating to Cell C, and 12.35% of talk time minutes terminating to a fixed-line.

DataRoom found it was not an effective comparison to calculate the ultimate rand difference overlaid on various prepaid contracts. It also points out that individual call patterns vary greatly and must be contextualised for individuals.

The second exercise was for a sample of 210 CDRs, with the 8ta call rates of per minute increments compared to a per-second rate to mobile and fixed-line of R1.75 per minute, that was billed per second. This exercise excluded incoming rebates offered on 8ta on a promotional basis and SMS costs.

Of the 210 CDRs, 25 were to Telkom landlines, and DataRoom found the R1.75 rate that was billed per-second by the other network operators was 25% more cost-effective than the 8ta rates.

The final exercise was a random sample of 375 CDRs with the 8ta per-minute billing increment, compared to a per-second rate to mobile and fixed-line of R1.75 per-minute, that was billed per-second. Again, the incoming rebates offered by 8ta were not considered and neither were SMS costs.

DataRoom found 8ta was 18% more cost-effective than the R1.75 flat rate comparative.

Call management

Observations by DataRoom were that peak and off-peak times are not transparently displayed on the various mobile operators' Web sites, which makes it difficult for consumers to manage their own call patterns where rates for peak and off-peak differ.

DataRoom says Vodacom, MTN and Cell C reflect the billing increments in their respective rate sheets.

Thirdly, DataRoom says 8ta does not reflect its offering as billed per-minute. “This means that for a 10-second call, you will pay for one minute. This is important to know, as it impacts heavily on the resulting effective rate the consumer pays. This is contradictory to costs being fully transparent to the consumer,” says the DataRoom analysis.

The analysis states 8ta's base cost (without value-adds) is the same as the Cell C Easychat AllDay offering.

DataRoom says 8ta's offering of one free second per call for every three seconds of incoming calls received is only valid for a limited promotional period, but that 8ta has not disclosed the duration of this period.

It says the free SMSes offering by 8ta, whereby 50 free SMSes are granted for every five paid ones, is a new offering to the market and is a significant differentiator for the consumer who uses text a lot.

Commenting on the DataRoom analysis, World Wide Worx MD Arthur Goldstuck says: “It seems that Cell C do have a point in that 8ta have effectively copied their rates. However, the analysis shows some interesting points, like just how cheap an SMS is for a telecoms utility.”

Goldstuck says his own research has shown that cellular calls billed per-minute are at least 40% more expensive than those billed per second.

Trillion Dollar mobile voice and data business

Gartner says mobility will be a trillion dollar business by 2014
Worldwide mobile voice and data revenue will exceed one trillion dollars a year by 2014, according to Gartner.

Mobile will generate revenue from a wide range of additional services such as context, advertising, application and service sales, and so on. Each of these will be a significant business worth several tens of billions of dollars per year.

Gartner analysts outlined the future of the mobile industry at Gartner Symposium/ITxpo 2010, being held here through today and on 8-11 November in Cannes.

“We see three major eras of mobility,” said Nick Jones, vice president and distinguished analyst at Gartner.

“The device era was characterised by iconic devices such as the Motorola RAZR and was dominated by device manufacturers. This was followed by the application era which arrived with the iPhone, popularising application and media stores. Going forward, the service and social era will build on the application era, but it will be characterised by cloud services and streaming media. Applications will survive, but often as a component of a more complex end-to-end experience involving the cloud.”

In mature markets, smartphones will dominate device sales for the foreseeable future. However, the dominant mobile device type shipped globally will be feature phones without an identifiable operating system (OS) because emerging markets dominate handset demand.

Organisations operating in emerging markets should assume smartphones will be a niche device beyond 2014.

Many new device types such as tablets and e-book readers will emerge through 2012 and some will find a role in corporations.

However, none will achieve a market share comparable to smartphones or laptops, which will remain the dominant corporate mobile devices. Mobile knowledge workers will require both a PC and a smartphone through 2014.

The smartphone platform space is very competitive, and the leaders will change through 2014 with Symbian is losing share to Android and iPhone OS (iOS). Android is gaining ground fast and will appear on consumer electronics and non-handset devices such as tablets.

“As the platform wars rage, a variety of new tools are becoming ‘platforms’ in the sense that they provide a user experience and framework for delivering applications,” Mr Jones said.

“These include the mobile Web, where HTML5 will be very influential, OS independent ‘platforms’ such as Flash, and scriptable tools such as augmented reality browsers and mapping systems. In the long term, some will be absorbed into the OS or browser.”

Gartner said that context will be a defining principle of mobile business for the next decade. It will play a key role in many areas of mobile business, especially advertising and marketing.

“In 2010, we are seeing the beginning of simple context using location to suggest interests and to guide searching,” Mr Jones said.

“Context will also be a key criteria for the selection of partners. Many mobile business systems will exploit contextual cloud services hosted by others. It will also be a major commercial battleground with powerful vendors such as Nokia, Google, and Apple striving to own the consumer’s context. Context will also be bound up with social relationships and social networks, illustrated today by services such as location-tagged posts to Facebook and Twitter.”

Mr Jones advised organisations to develop a high-level mobile strategy based on technology-independent management goals and styles, rather than detailed device, platform or application policies.

Traditional mobile strategies were designed to support well-defined requirements with devices, applications and services provided and managed by IT professionals. Requirements of this type will persist, but it will not form the majority of corporate mobility by 2015 because of changes in user requirements, technology, and the nature of work itself.

- compliments of My Broadband

Cloud computing still risky / ITWEB

By Nicola Mawson, ITWeb senior journalist.
Johannesburg, 31 Aug 2010

A move to cloud computing is seen as an inevitable shift in the future, but many large organisations are reluctant to take the plunge, says Gartner.

Cloud computing is expected to grow from being a $58.6 billion industry last year to one that will be worth more than $148.8 billion in 2014, according to Gartner research. Companies will invest $112 billion in the cloud in the next five years.

Daryl Plummer, managing VP and Gartner Fellow, says the move to cloud computing is inevitable. However, there are still concerns around the safety of outsourcing key functions to a cloud provider, he adds.

Among the benefits of moving to computing in the cloud is the fact that companies do not need to invest in infrastructure or software, says Plummer. He says this allows firms to retire IT equipment, which typically depreciates rapidly. “It's not an investment opportunity to buy technology.”

Plummer explains that, although moving to cloud computing may require the same expenditure as owning equipment, there is a clear line of sight as to where this spend is going. Software as a service, for example, is often a pay-per-use purchase.

Risky business

Despite the apparent benefits of moving into a virtual environment, 70% of the companies Gartner surveyed, with 1 000 or more staff, have not developed a cloud initiative yet, says Plummer.

The reasons cited by these companies include security concerns over having information stored somewhere that is out of their control. In addition, firms are worried that there is no compliance reporting or audit trails once information is stored in the cloud.

Plummer adds that companies are also concerned about the quality and predictability of services provided in the cloud. In addition, if the company hosting the information folds, then that data will be lost, he says.

“Whose responsibility is it for your business when the failure happened three steps down the chain?”

Plummer points out, however, that CIOs cannot ignore the move to cloud computing. He explains that staff at companies are already making use of cloud computing, without CIOs even being aware of the shift.

“People are in the cloud for real, they aren't going back, it's not a fad,” says Plummer.

As a result, he says CIOs need to put a plan in place to manage the risks of moving into the cloud environment.

* Nicola Mawson was being hosted courtesy of Gartner.

Interconnect regulations ready to go | ITWeb

By Leigh-Ann Francis

Johannesburg, 22 Oct 2010

The telecommunications industry is set for another big shake-up as the Independent Communications Authority of SA (ICASA) commits to publishing the final version of call termination regulations on Friday, 5 November.

The highly contested regulations have been in the pipeline for some time now, as the authority sought to cover all procedural bases. This included opening the draft regulations up to public comment, holding public hearings, and most recently, conducting private meetings with specific players within the industry.

With all these milestones completed, ICASA spokesperson Jubie Matlou says the authority will publish the regulations ahead of its regular meetings with Parliament, which is scheduled for 9 November.

Matlou would not, however, comment on the degree to which the interconnect rates will be cut or over what timeline.

However, regardless of the interconnect rate levels contained in the new regulations, consumers should not get too excited, as it was earlier revealed that a reduced termination rate has no direct impact on retail pricing.

WWW Strategy MD Steven Ambrose explains that there was never any correlation between the interconnect and the cost of cellular calls, and the Department of Communications was simply being populist in its advocacy of having these cuts in the name of lower telecommunication costs.

The only real impact of rate cuts would be on off-net costs, which will, in turn create competition, eventually resulting in consumer savings, but this is still years away.

The proposed regulations have been met with mixed reaction from industry, as smaller players advocate for increased competition, while bigger players argue that the proposed cuts are too drastic.

Possible cuts

Mobile operators will have the most to lose if the proposed regulations are passed, as they are, into final format, since they will be forced to drop the interconnect rate by 50% this year alone, including a voluntary rate cut from R1.25 a minute to 89 cents, in March.

Further to the voluntary cuts, the draft regulations proposed that the rate again be cut to 65c, in July, with a glide path leading to 40c by July 2012.

However, the July reduction was delayed after mobile operators voiced their concerns at public hearings, arguing that the proposed glide path was far too drastic and would likely shock existing business models.

It is not yet known whether the authority will heed these concerns or if it will still enforce the rate cut to 65c a minute this year. The latter option, however, has been met with much resistance from industry.

Strong resistance

During its last interim results presentation, Vodacom reported close to R400 million in lost revenue, due to lower mobile termination rates, which is why the operator has been opposed to yet another cut this year.

At the time of the hearings, Vodacom MD Shameel Joosub noted: “The proposed glide path is steep and unprecedented, to such a striking degree that, if not modified, the shock to existing business models will be devastating.”

Joosub explained that an eco-system exists around the current mobile termination rates, noting that further cuts this year do not create space for business plans or planned capital expenditure programmes to be revisited.

MTN echoed these concerns and pointed to the effects of the voluntary rate cut in March, which resulted in a 30% reduction in the company's 2010 capex, resulting in MTN cutting jobs and seeing an impact on its channel.

ICASA hit back at the time, arguing that a regulator is not compelled to offer a glide period; however, this structured approach is to offer the industry time to adjust and compete in the new environment.

The regulator pointed out that mobile operators are suggesting that the regulator, in effect, delay the proposed consumer benefit for four years.