Offerings from two very different companies mean you won’t get ripped off.
Hilton Tarrant
06 Mar 2008 09:47
International call pricing is one of those areas of the telecommunication market where phone companies nod and smile while charging like a wounded buffalo. A friend last week needed to make an urgent call to Sao Paulo. His DSL and phone line were down (a problem with Telkom’s (JSE:TKG) Crowthorne exchange, allegedly). The two minute call on his cellphone cost him R20; a small fortune, considering how cheap global communication has become.
Literally hundreds of small companies have sprung up in the past few years, offering a call-back service that uses VoIP to route calls overseas. The number of these companies is growing, and prices are falling. It’s no coincidence then, that Telkom happens to drop its international call rates every year at its annual pricing change. As chance would have it (or not), MTN (JSE:MTN) last month dropped its international prices considerably. It pointed to a rather opaque “change in government legislation” for the move. MTN contract customers will save up to 29%, while prepaid customers see an up to 60% saving. A call to the US will cost about R2,90 a minute.
The premise with the VoIP services, is that you buy a voucher for, say, R50. This entitles you to a certain amount of credits. You phone a local number, and your international call is then routed to overseas via a much cheaper gateway. For example, recently-listed electronics company, Ellies (JSE:ELI), operates a service like this (called Real Talk). A call to the continental US, costs 39c a minute. Services like these are clumsy though. They require you to track down a reseller to buy a calling voucher (usually a convenience store at a petrol station). Other alternatives like the ever-popular Skype exist, but this requires a computer, relatively high-speed internet connection and sound equipment like a microphone.
But this week global mobile social networking and instant messaging player, Mig33, formally launched its foray into low-cost international calls here in SA. The network, a viable competitor to local kingpin MXit, has more than 2m users in South Africa, with no formal marketing or advertising. The cellphone chat application which also allows users to send discounted SMSs and make phonecalls via VoIP used to rely on only credit cards as a means of payment. This limited the reach of their fee-based services in emerging markets like South Africa, says co-founder and vice president: special projects, Mei Lin Ng.
Ng says a prepaid card was a solution and the company will offer these cards at over 2 000 retail stores in the country. Mig33 is in negotiations to expand this footprint dramatically. Users buy the voucher, log in to the Mig33 mobile site or program on their phones and add credits. “Make a call” or “Send SMS” is selected and the international call is connected. Call rates vary, but a call to the US, for example, will set you back R1,72 per minute. In some cases, the cost of international calls is reduced by as much as 95%.
Obviously, cellphone networks can’t be too happy with services routing traffic via VoIP. Ng says that in many markets, users are “pretty smart about how they make international calls”. She points to the multitude of services that make use of calling cards. “Carriers were probably never going to get that revenue anyway,” she says. Mig33 defends its VoIP system and points to the fact its boosting data traffic and revenue for the networks.
Mig33’s Ng said the decision to launch in South Africa was not difficult, as the attraction of a service like this (when compared to something like Skype) will be higher in markets where people use their mobile phones to access the internet.
Mig33 will also look to expand beyond its existing revenue-generating services. It will step into the ringtone and mobile game market next month, in a move to diversify its revenue streams.
Wireless internet provider iBurst this week also announced price cuts to its iCall service made public late last year. One can either use a Webfone (which looks like a Telkom landline, with an aerial), or a VoIP phone connected via an iBurst modem. Calls between iCall users remain free, and from this month, iCall subscribers will pay 18% less for national peak calls, 10% less for national off-peak calls, 19% less for cellular peak calls and 11% less for cellular off-peak calls.
iBurst says international savings are dependent on destination. Popular destinations like the UK, the US and Australia will be 50% cheaper.
iBurst has also concluded interconnect agreements with all the networks, enabling iCall users to receive incoming calls. iCall subscribers pay R50 a month for the service.
Incidentally, iBurst also announced price cuts effective from April for its broadband services this week. A 1GB package, for example, has dropped to R199 (from R369 for 1.2GB). A 3GB package will cost R449.
