{"id":11681,"date":"2012-05-07T12:44:41","date_gmt":"2012-05-07T10:44:41","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=11681"},"modified":"2012-05-07T13:24:17","modified_gmt":"2012-05-07T11:24:17","slug":"lcr-vs-voip-in-the-spotlight-again","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/11681\/lcr-vs-voip-in-the-spotlight-again\/","title":{"rendered":"LCR vs. VoIP in the spotlight again"},"content":{"rendered":"

Huge Telecom<\/a> CEO, James Herbst<\/a> has defended least cost routing (LCR)<\/a> as a business model, and believes that Voice over Internet Protocol (VoIP)<\/a> will come under threat following the launch of LCR AnyNet, from mobile operator Cell C<\/a>.<\/p>\n

Alan Knott-Craig<\/a>, Cell C CEO says that LCR AnyNet will reduce the cost of telecommunications for business and will bring down the barrier to entry for small businesses hoping to take advantage of least cost routing.<\/p>\n

He notes that small businesses have previously been excluded from the benefits of LCR, due to the high monthly subscription rates associated with the service.<\/p>\n

LCR AnyNet will cost a minimum of R150 per SIM per month and will provide a flat-rate of 99c across mobile networks and 60c to fixed-line networks. Cell C has put in place a specific activation process that will ensure the best quality of service to the customer.<\/p>\n

Huge\u2019s Herbst says that over the past few years many industry commentators have questioned his company\u2019s go-it-alone strategy of sticking to fixed cellular routing (FCR), the technology solution originally used to deliver LCR.<\/p>\n

It followed a mass exodus of LCR industry participants to VoIP strategies, including Nashua Mobile<\/a>, Vox Telecom<\/a> and Altech Autopage<\/a> \u2013 once three of the four largest LCR Service Providers in the market.<\/p>\n

Herbst has come under fire in the last few years for not jumping on the VoIP bandwagon and instead single-mindedly pursuing a strategy of Fixed Cellular Routing (FCR) – but Herbst says that Huge Telecom\u2019s decision to ignore the populist approach, and focus rather on sound underlying principles and basic market rules of economics, has paid off.<\/p>\n

\u201cWe have consistently maintained that market forces will drive down wholesale cellular prices to a point where they are on a par with or better than wholesale fixed-line prices. Quite simply, in Africa, cellular technology is the hero of the present and the way of the future,\u201d he said.<\/p>\n

Herbst has argued that providing VoIP over legacy fixed-lines provided nothing more than a false sense of security, and that the wireless last mile provided by the mobile network operators – being Cell C, MTN<\/a> and Vodacom<\/a> – would prove to be the most appropriate technology infrastructure option to deliver sustainable corporate telephony solutions in South Africa.<\/p>\n

\u201cWe concluded a new supply agreement with a mobile operator last year that significantly increased our viability in the market for fixed cellular routing solutions,\u201d the CEO said. \u201cThe pricing was right and the wholesale structure of the agreement allowed us to benefit from falling termination rates, as was intended by the regulator.\u201d<\/p>\n

However, Cell C\u2019s new offering may logically lead one to question whether Huge Telecom\u2019s contrarian strategy, which has by default now given it a first-to-market position, has been eroded by Cell C\u2019s new offering.<\/p>\n

\u201cAbsolutely not,\u201d said Herbst. \u201cIn fact we believe that Huge Telecom is in an incredibly strong position with Cell C and other mobile operators, because, unlike the VoIP proponents, Huge Telecom deliberately chose not to build its own network to try and compete with the incumbent telecom operators.”<\/p>\n

“Indeed, as an operator Cell C may well see the likes of Vox, Nashua, Internet Solutions, and Autopage as competitors at the operator level, whereas we believe that Huge Telecom is far better positioned to partner meaningfully with the mobile networks because of its pure service provider, rather than aspirant network operator, status,\u201d he added.<\/p>\n

Huge believes that, while Cell C is the first-to-market in this latest iteration of the corporate telecoms saga in South Africa, rivals in MTN and Vodacom will want to follow suit. \u201cI think that we are about to see a wholesale price war in the corporate telephony voice market,\u201d Herbst suggested.<\/p>\n

The group points out that a wholesale price war between the telecom operators will serve to drive down wholesale input costs for service providers and will bring a corresponding upward swing in fortunes for the likes of Huge Telecom.<\/p>\n

Herbst confides that one of the key reasons Huge Telecom never pursued a VoIP strategy, besides their belief that mobile was the way of the future, was because he never understood how the small albeit aspirant new telecom operators could attempt to take on the incumbent major operators in SA.<\/p>\n

\u201cMobile operators in South Africa control more than 90% of voice termination. To back any other horse, or worse, to try and breed a new horse when the race started decades ago, just seemed like madness to us,\u201d he concluded.<\/p>\n

Related articles<\/strong><\/p>\n

Cell C LCR product a \u2018game changer\u2019<\/strong><\/a><\/p>\n

Huge Telecom primed for \u2018strong organic growth\u2019<\/strong><\/a><\/p>\n

No telecoms game changer expected for 2012?<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Huge Telecom CEO, James Herbst has defended least cost routing (LCR) as a business model, and believes that Voice over Internet Protocol (VoIP) will come under threat following the launch of LCR AnyNet, from mobile operator Cell C.<\/p>\n","protected":false},"author":9,"featured_media":4741,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[43,1949,42,2671,26,493,491,2670,28,551,27,1707,62],"class_list":["post-11681","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-alan-knott-craig","tag-altech-autopage","tag-cell-c","tag-fixed-cellular-routing","tag-headline","tag-huge-telecom","tag-james-herbst","tag-lcr","tag-mtn","tag-nashua-mobile","tag-vodacom","tag-voip","tag-vox-telecom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/11681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=11681"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/11681\/revisions"}],"predecessor-version":[{"id":11744,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/11681\/revisions\/11744"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/4741"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=11681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=11681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=11681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}