This issue of Africa Telecoms is focused on two distinct topics. That of West and Central Africa as a region and the interconnection debate. Vox has always taken an active role in interconnection discussions in South Africa. What is your opinion on the correct way to calculate a fair interconnection rate?
We believe it should be regulated, there should be one interconnection rate for both mobile and fixed, and the guideline should be 3 to 4 US cents.
Does Vox Telecom have any operations outside South Africa?
We have operations in Namibia.
Do you have any plans of expanding into the continent? If so, when would you expect to start this expansion? And in which markets would you look to start working in?
We will expand into Africa once we develop a formula that will work in major cities and once the markets liberalize further. How has the last set of interconnection reductions as set by ICASA affected Vox Telecom's revenue? Have you seen a substantial drop in costs and revenue due to the reductions?
Overall, it has had a positive effect on the Vox Group, improving our competitiveness – but it was very much a gaining on the swings, losing on the roundabouts scenario. We will have to
replace obsolete business models with new ones.
Do you think that interconnection rates are a valid cost in the telecoms space? And do you think that South Africa will ever see itself in a position where there is no interconnect cost?
Yes, the Interconnection rate is valid; and we must be careful of eroding the value chain so much that we drive away investment in telecommunication infrastructure. Also, if we have a zero cost it will result in the consumer paying for the call. This scenario will make it almost impossible to compete with any telco that has a dominant market share and cause havoc amongst the consumers.
How do you see the fixed termination rate ruling by ICASA affecting Vox's business in the next 12-18 months?
Overall it is positive, good for the consumer and good for Vox. Although I do think that South Africa should have a one price policy, I don't believe you can regulate around technology: it changes too fast and the service should be defined. For example, termination of a voice minute, not VoIP, mobile, fixed, wireless etc.
Vox has seemingly been on a big drive to convert its leastcost-routing clients (LCR) to Cristal Vox. What is the difference between the two and is Cristal Vox a higher margin earner than LCR?
The Cristal Vox margins are much better than the LCR margins (old and current) when you take into account the additional minutes captured and the inbound minutes.
Are you seeing a good conversion rate of new clients in South Africa moving onto Cristal Vox?
Yes, and we are fortunate enough to do it at a pace that suits our customers and Vox Telecom because the value proposition and margins are very similar at the moment.
What is the expected saving that a consumer can expect when moving onto your network?
Vox is a low-cost operator and thus should always provide 15 to 30% savings against the standard incumbent pricing.
Does Cristal Vox run on an entirely Vox Telecom-owned network? And what is the extent and make-up of this network?
Cristal Vox does not travel across the ADSL cloud or any other network where we do not control the quality until we switch the minutes to the destination network. ADSL voice services are branded differently.
What is Vox doing to improve the quality of calls made on its own network? Has there been a quantitative improvement on the network quality since the upgrade from Cisco to Juniper equipment? What did this upgrade involve?
We have invested extensively in carrier-class equipment, Cisco, Juniper and Alcatel; and that along with fibre and Metro E have made an enormous difference to the quality for the network. We have also heavily invested in security, load balancing, monitoring and measurement infrastructure.
Since the launch of your video-conferencing service have you seen a strong performance from this product?
Yes, so much so that we have invested further and now have some of the best skills available in South Africa in this field.
Vox Telecom has always been a company driven by innovation. What can we expect from Vox in the coming years and what is the most innovative product launched by Vox in the past 12 months?
Towards the end of the year we will technically be able to differentiate our internet and broadband offering extensively with price, billing and having the ability to tailor-make unique solutions. We are also going to attack the lower LSMs and are building a distribution network and prepaid systems along with suitable products for this end.
Has number portability had the desired effect on your corporate voice business that you expected a year ago?
No, we have had to overcome a lot of technical and routing issues that are out of our control and had to slow down our implementation. However, the strategy is sound and we are speeding up the implementation process again.
What is the current churn rate for Vox Telecom?
If we include downgrades, just under 1,4% pm.
What do you think the biggest game changer is going to be in the telecoms industry in Africa in the next 12 months?
Vox Telecom, of course
Skype is certainly making waves in the VoIP business worldwide. How do you view Skype – as a competitor or as an enabler of the technology?
Microsoft Hosted Platforms are a major part of our strategy and we welcome the integration of Skype into Microsoft's new Link Product which we aim to market shortly. Skype is also an important value add in the broadband sector.