Skip to content

Connect-World: the leading Telecom magazine, ICT magazine, Telecom magazine, ICT and Telecom Industry Press Releases and Blog.

 

Loading...

Welcome to Connect-World, the information and communication technology (ICT) decision makers' magazine.

Increase font size  Decrease font size  Default font size 
You are here:     Home Article Africa and the Middle East 2004 Packet Voice Telephony Shines Brightly in Deregulating Markets

To join our mailing list click here

captcha 

Packet Voice Telephony Shines Brightly in Deregulating Markets

Written by  Ingrid Simunic
Rate this item
(0 votes)
Ingrid SimunicIssue:Africa and the Middle East 2004
Article no.:15
Topic:Packet Voice Telephony Shines Brightly in Deregulating Markets
Author:Ingrid Simunic
Title:PhD., Marketing Director
Organisation:VocalTec Communications
PDF size:568KB

About author

Dr Ingrid Simunic is the marketing director of VocalTec Communications. She has led marketing operations for telecom companies in both developed markets, such as the US, as well as emerging markets in Europe. Her international experience of equipment vendors and service providers includes working with startups and established companies. She writes for and has been quoted in, many business and trade journals. Ingrid holds a doctorate in marketing science.

 

Article abstract

Deregulating countries in Africa present a huge opportunity for telecom service providers and equipment vendors. In Africa, the limited infrastructure results in repressed demand for telecom services. Nigeria, which has a recently deregulated telecom market, provides a vivid example of this. A number of competitive fixed line and mobile service providers have begun to offer economical services to the phone-starved Nigerian public over a cost-effective packet voice architecture. A scalable and granular VoIP solution allows companies to start small and grow over time.

 

Full Article

Introduction While the global telecom markets have been under a shadow from the recession in the large North American and Western European telecom sectors, refreshing pockets of opportunity and growth surfaced in emerging and deregulating markets in Africa, Asia, Eastern Europe and elsewhere. In these emerging economies, deregulation, combined with the increased availability of proven packet telephony technologies, is driving growth and a wide range of opportunities for telecommunications service providers. This paper discusses current dynamics driving telecom growth in numerous emerging economies, which hold long-term implications for the future of the global telecom industry. In particular, this paper highlights the benefits of packet-based telephony networks for emerging economies, as well as the types of services and applications that are being offered to meet the needs of these markets. Deregulation spurs growth in emerging economies: Africa and Nigeria Deregulating countries in Africa present a huge opportunity for both telecom service providers and equipment vendors because they have insufficient infrastructure build-out, low teledensity and high call tariffs, coupled with an unsatisfied appetite for telecom services. It is estimated that in the next five years, the bulk of telecom industry revenue growth will occur in emerging countries worldwide. It is also expected that emerging countries will continue to have a higher adoption rate of new advanced telecom technologies, particularly packet voice and mobile infrastructure. Nigeria, Africa’s most populous country, which has a recently deregulated telecom market, provides a vivid example of this trend and drivers shaping such markets. With a growing domestic market of over 130-million people, a prominent role as a trading hub in West Africa and beyond and one of the least developed telecommunication networks on the continent, Nigeria is a country of potentially vast opportunities in the communications sector. The current fixed line network of Nigeria’s incumbent carrier, NITEL, does not adequately address the needs of the expanding business sector or the demand in the residential sector. Out of some 700,000 lines installed, only 492,000 are operational – the vast majority of them concentrated in a few major cities. Nigeria’s teledensity is among the lowest in the world, estimated at 0.38 telephones per 100 inhabitants according to analyst reports. The licensing of four GSM operators was a watershed event for the Nigerian telecom industry, successfully launching Nigeria into the digital world. The country’s regulatory body, Nigeria Communications Commission, granted licences to 13 private companies to operate fixed wireless access services. Shortly after, it endorsed Globalcom as the second national operator, alongside several regional private telephone operators. The onset of competition has also led NITEL to take steps to modernise and upgrade its own network. It is in the midst of implementing a fiber optic backbone and has announced plans to have eight million lines installed by 2008. After a prolonged telecom deregulation process, a number of competitive fixed line and mobile service providers, such as Adesemi Nigeria Ltd. (Adesemi), have begun to offer economical local and long distance services to the phone-starved Nigeria public. Case study: Adesemi Adesemi Nigeria Limited is a leading provider of both communication equipment solutions and communications services for businesses and consumers. As a leader in the telecom and Internet industry in Nigeria, its products provide enormous revenue generating opportunities for other players in the industry. Adesemi’s customer base is spread over 13 states of Southern Nigeria. The company’s various business divisions offer value-added services for provisioning Internet access and online services, VPN (virtual private network) and Voice over IP (VoIP), payphone and calling card services. It also has numerous other product divisions, such as: cybercafe franchises; customised software design, development sale and the design and development of e-commerce solutions and rich content information. Adesemi’s strategy is to provide high-quality voice and data services at reasonable prices to the Nigerian public and corporate customers. Branded by Adesemi’s Komtone division as Callpoint™, it uses a VoIP platform to support cybercafes and public pay phone services in densely populated urban areas. At a later stage, the company plans to expand these services to all of Nigeria, including remote rural areas. Business Challenge and Requirements To support its low-cost business model, Adesemi sought a solution that would enable it to reach the large masses of the population, mainly in urban areas, that do not have basic telephone service, without substantial deployment of expensive equipment. Like most competitive carriers in emerging economies, it required a low budget solution enabling the rollout of basic telephony service in the shortest possible time frame. The solution had to be capable of surmounting the lack of fixed line infrastructure and physical obstacles, as well as facilitating the addition of new advanced services. Packet Telephony Solution Meets Adesemi Nigeria Business Requirements Adesemi selected a field-proven multi-service platform to support local, national long distance and international prepaid calling card voice services over a cost-effective packet voice architecture. This provides a scalable and granular VoIP solution, which allows Adesemi to start small with low entry costs and grow over time. Voice over IP technology, integrated with Wireless Local Loop (WLL) and satellite remote gateways at the transport layer, provides Adesemi with a complete solution by providing the billing (postpaid and prepaid), management and provisioning functions. The VoIP/ WLL/ satellite solution matches the needs of cybercafes and telecentres in both urban areas and outlying villages for voice connectivity. The VoIP/ WLL/ satellite solution also provides access to data networks (Internet) for e-mail, file transfer, electronic databases, government and community information systems, market and price information, etc. Next Generation voice deployments Packet telephony (or VoIP) solutions are optimized to support long distance/ international services in deregulating markets. Packet tandem switching solutions dramatically reduce time to revenue, allowing carriers to begin to transfer traffic in very short time frames, as well as slashing the capital and operational expenses normally required to build traditional circuit-switched networks. Globally, many carriers are still in ‘test mode’ with packet telephony. Nevertheless, these packet telephony networks are already generating traffic that represents approximately 18 per cent of the world’s international traffic and are being operated by some of the world’s largest international carriers. Deployment of packet voice solutions can be regarded as capital expenditure spending that directly translates into operating cost reductions (30 per cent-40 per cent less than traditional TDM networks). Packet tandem switching technology requires fewer ports per call and lowers transport costs based on IP topology. Carriers with existing data networks entering the voice market are able to deploy such solutions over their existing IP network infrastructure. This convergent network saves the substantial costs of operating and, also, managing separate networks for voice and data. Additionally, the high growth of wireless communications in emerging economies – often to the exclusion of fixed line telephony – has further eroded the fixed line carrier’s bottom line. Packet telephony solutions offer the promise of new revenue streams via new, highly targeted, enhanced, application services, such as voice VPNs (private networks for enterprises that enable low-cost intra-office phone calls between branches worldwide) and new calling card services, while at the same time maintaining existing revenue streams. As mentioned, carriers will only evaluate new enhanced services if they provide short-term economic benefits. Basic voice VPN and IP calling card services meet these criteria and allow for a migration to the true next generation all IP network, where all phone service applications are offered on an IP platform. Another advantage of packet architecture is that it does not disturb or threaten the existing successful ‘vertical services’ business of the telcos. The capital expenditure is focused on retaining these revenue streams on a less costly platform, allowing the carrier to achieve high revenue retention from existing services. New competitive environments in deregulating countries inevitably result in shrinking margins as more players enter the market. Packet telephony allows for better margin management by enabling lucrative services while reducing operating costs. Conclusion The market opportunity for packet telephony is huge and growing, especially in deregulating telecom markets for which packet voice technology’s low cost structure is well suited. As case studies in Africa and elsewhere have demonstrated, packet telephony solutions can accelerate deployments in these markets, enabling carriers to achieve rapid return on low initial investment. Teledensity continues to increase throughout the world’s emerging economies, while costs are continually driven lower by the economies of scale and technological innovation. While overall market growth will develop more slowly than was originally anticipated, it will be driven to a larger extent by carriers in emerging economies. By leveraging new packet-based technologies, the larger carriers in these markets are likely to be a driving force for the growth of new networks and associated next generation services.

Read 2617 times
Login to post comments