MTN gives VANs runaround

Value-added network service providers (VANs) struggle to conclude interconnect agreements with mobile operator MTN, they allege.

The interconnect agreement is critical to enabling the provision of full voice offerings over IP networks.

The allegation is the latest in a long list of complaints from VANs; however, fixed-line giant Telkom has been at the centre of most of the dissatisfaction. Following the legalisation of voice over IP (VOIP) in February 2005, Telkom has often been accused of being slow and even disinterested in signing interconnect agreements with VANs.

Earlier this year, VANs accused Telkom of hampering VOIP by proposing retail rates which would make the service prohibitively expensive for customers. These rates went into effect at the end of May, opening the way for Telkom clients to make calls to VOIP numbers.

While most VANs say they have concluded interconnect agreements with Telkom, Vodacom and Cell C, they accuse MTN of trying to delay interconnection through heavy-handed negotiation tactics.

Vox Telecom CEO Douglas Reed explains: "I'm not afraid to name MTN. The company has been arrogant with the VANs and quibbling with the negotiation process for ages now. Quite frankly, I'm sick of it. Our contract has been back and forward more times than I care to think about.

"As for the rest of the telcos, Vodacom has been the most professional and efficient, having finalised our interconnect agreement in November. Telkom came through in May and Cell C about two weeks ago," he adds.

Reed's statements echo the testimony of Internet Solutions' senior regulatory affairs officer Siyabonga Madyibi, at the Independent Communications Authority of SA (ICASA) hearings into wholesale termination.

At the time, Madyibi alleged MTN had refused to enter into interconnection agreements with VANs without substantial guarantees on volumes.

"The reason we don't have an interconnection with MTN is that it won't negotiate terms and it is demanding that we guarantee a certain amount of traffic. If a provider doesn't meet the guarantee, it will be penalised. New entrants [to the voice market] cannot guarantee traffic," he said.

He added that interconnecting with both fixed-line and mobile operators was a critical aspect of providing voice services to private and retail customers. "There is no doubt that in SA, if you are in the telecoms business and don't want to interconnect with Vodacom and MTN, you might as well be in another business, maybe agriculture."

Storm Telecoms business unit manager for its voice division Kevin Jacobson confirms one mobile operator is being "a nightmare to deal with" but declined to name the company.

"One of the mobile operators has been putting obstacles in the way of our concluding an interconnect agreement. We have been back and forth several times and still haven't got it right. Their demands make it more feasible to continue offering least-cost routing than deploying VOIP services," he says.

In response to the criticism, MTN regulatory affairs GM Graham De Vries says the operator has finalised a number of interconnection agreements with VANs.

"We are still negotiating with other entities that have requested interconnection from MTN. Those negotiations are at a very advanced stage and MTN is actively seeking to reach agreements on mutually acceptable terms," he explains.

Additionally, De Vries says the company believes it is acting in a "financially responsible manner" and in compliance with regulatory requirements.

"Should there be any other items that require discussion, it ought to be brought to the attention of MTN within the negotiations."

Meanwhile, voice entrants say they are almost ready to provide full voice and data services to customers.

Reed says his company has been physically ready since November 2006, has allocated numbers to some of its customers and is busy concluding trials on its voice services.

Jacobson says Storm has issued a small amount of its numbers and is testing the quality of services before rolling them out.

Verizon's business executive for legal and regulatory affairs Edwin Thompson says it should be ready to go to market with voice offerings within the next two weeks.

IS business development executive Hillel Shrock says the Dimension Data subsidiary is already offering such services.