Raised Voice

Cost savings and the recent entrance of several service providers are driving usage of voice-over-IP in Africa, despite legal restrictions. Paul Budde maps out the emerging market

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By  Richard Agnew Published  August 31, 2003

|~||~||~|Cost savings and the recent entrance of several service providers are driving usage of voice-over-IP in Africa, despite legal restrictions. Paul Budde maps out the emerging market

Voice over Internet Protocol (VoIP) is finally starting to take off in Africa, spurred by steady improvements in internet bandwidth.
A growing number of VoIP service providers have entered the market, including Deltathree, ITXC, iBasis, Net2Phone and Veetone.
ITXC alone experienced an increase of 111% in voice traffic to and from Africa during 2002.
VoIP technology allows voice, data, images and video traffic to travel over the same network at the same time, making it more cost-effective than traditional voice and fax services supplied by the established telecoms companies.
The primary reason for using VoIP is cost. Using one network, instead of two, reduces line rental and servicing costs. Long-distance call costs are also reduced as voice traffic bypasses the Public Switched Telephone Network (PSTN.)
Most developing countries also pay exceedingly high tariffs for termination of international calls in the USA or Europe.
When this is added to the high fees charged by the typical monopoly telco in Africa, the cost of international calls becomes exorbitant.
As a result, the cost savings of VoIP are enough for a significant percentage of the eligible population to be prepared to suffer the generally lower quality voice achieved by the technology without using a dedicated network.
There are also substantial cost savings for public telecoms operators (PTOs) from VoIP. When using the services of an international VoIP operator, usually with a dedicated network, settlement rate balancing tariffs can be avoided, typically saving around 50% of the cost of terminating international calls.
Aside from bringing in new minutes via VoIP from those calling from Africa, VoIP can also be used to bring in calls that would otherwise have been made elsewhere.
This has been shown by the experience of Togo, where Africa’s first VoIP-based call centre was established in early 2001. The call centre is dedicated to serving North American clients on a full time basis.

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In almost every nation on the continent up to 10% of the international call market uses VoIP illegally.
A number of African countries now place restrictions on the use of VoIP, while other countries have yet to formulate any specific regulations.
A few have laws completely prohibiting its use, while other countries have legislated to restrict its provision to the (usually government-owned monopoly) PTO.

Egypt
At least 10 companies provide VoIP services in Egypt, including the national monopoly, Telecom Egypt (TE). In March 2000, TE established an agreement with US IP telephony carriers to market retail IP VoIP services through a direct private IP link with the US. A PC-to-phone service is provided through TE’s website at a rate equivalent of around US 20 cents per minute. Incoming VoIP traffic is also terminated by TE at a lower settlement rate than for PSTN calls.

Morocco
In Morocco, Maroc Telecom launched retail VoIP services in 2001 using Globaltron’s US-based ATM/VoIP switching network and backbone. Current regulations do not allow public VoIP.

Chad
In Chad, operator, SoltelChad entered an agreement in August 2001 with VoIP network operator, ITXC, to carry international long-distance traffic over its private global VoIP network.

Gambia
Gambia Telecommunications Company Ltd (Gamtel) has been offering VoIP telephony since 2000 as a means of reducing the exorbitant tariffs for international traffic. It uses US-based IP carrier ITXC.

Senegal
Senegal’s regulatory authority, Agence de Régulation des Télécommunications (ART), has committed to the liberalisation of VoIP at the end of 2004. In October 2001, telecoms operator, Sonatel began completing calls generated by other ITXC carrier customers around the world and has co-located its own equipment at Sonatel switch facilities to connect those switches directly to ITXC.

Ghana
In February 2003, Ghana Telecom (GT) began imposing restrictions on the voice services offered by ISPs in a bid to reduce losses sustained by the illegal use of VoIP. However, the use of VoIP is expected to be legalised in 2003 after the regulator has developed and enacted legislation. In August 2001, GT began terminating international long-distance phone-to-phone traffic in Ghana using ITXC. It also plans to begin using ITXC to send calls abroad.

Nigeria
In Nigeria, many ISPs, cybercafes and business centres run by small entrepreneurs provide VoIP services. However, Nigerian Telecommunications Limited (Nitel,) claims that the licences do not provide for voice transmission. To clairify the issue, the Nigerian Communications Commission intends to update the licences because they were issued before IP technology emerged.

Tanzania
In Tanzania, VoIP was banned in February 2001 until further notice, with ISPs found to be contravening the ban facing prosecution.

Zimbabwe
In Zimbabwe, since March 2001, TelOne has been receiving international voice and fax calls over ITXC’s voice network. There are also plans to start originating calls to various international destinations via ITXC. TelOne operates a 2Mb/s link for VoIP traffic.

South Africa
In South Africa, the law restricts VoIP to use by Telkom SA, the second national operator and, since mid-2002, small enterprises serving areas where teledensity is less than 5%. ISPs and value-added service (VAS) providers currently may not offer VoIP services. In August 2001, Telkom SA and ITXC signed an agreement to exchange VoIP traffic. Telkom SA generates up to 5million minutes per month from VoIP, and has launched a regional clearinghouse to act as a ‘broker’ between other VoIP service providers, establishing interconnection, handling settlements, billing and administration for VoIP calls.

Paul Budde is an independent telecoms consultant, whose company BuddeComms operates one of the largest international telecom research sites on the Internet.
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