South Africa`s telecommunications sector continues to be stymied by punitive and superfluous regulatory structures that will gravely impede the development of the call centre industry. That`s the word from Jacques Du Toit, sales and marketing director at Orion Telecom. He says the regulatory environment has to be restructured if the country industry wants to compete with the likes of India, Mexico and the Philippines.
Our telecommunications policy remains disastrous, and is out of synch with the countries South Africa is seeking to compete against in the race for offshore call centre provisioning. In addition to the fact that the provision of basic telephony in this country remains a monopoly enjoyed by Telkom, infighting among the various regulatory bodies in the South African communications sector is slowing down the evolution of call centres. Their determination to protect their own empires will chase industries out of South Africa, and will induce foreign companies to outsource their requirements to countries with lower telecommunications tariffs and more business-friendly regulations.
The Department of Communication (DoC) and the Independent Communications Authority of South Africa (ICASA), the telecommunications and broadcasting regulator, are the two main players, and will no doubt steer all decisions made around pricing and other concerns. But additional bodies such as the Internet Service Providers Association (ISPA) and the Communications Users Association of South Africa (CUASA) also have to be heard, as do a myriad other smaller players, all of which have to justify their existence in one way or another. One question has to be asked, for example: if the DoC is doing its job properly, why is there a need for ICASA? We have a situation now where dozens of associations are demanding to voice their opinions. That`s all well and good, but the result is an extensive, drawn-out, costly process, the benefits of which are highly questionable.
At the moment ICASA`s spotlight is on interconnect fees - the rate at which one network operator charges another operator to terminate a call on its network - and how these raise landline and mobile costs. Interconnect fees are currently R1,25 per cellphone call, compared to the equivalent of about 20c in India. South African interconnect fees have risen by 635% since 1994, while peak local calls are among the most expensive in the world. Should ICASA succeed, the drop in call charges will result in huge cost savings for consumers, and will be of great benefit to the call centre market. But whether consensus will be reached among all the bodies remains an open question. Meanwhile, countries wanting to outsource their call centre requirements to South Africa are finding the costs exorbitant. This in turn is prohibiting the growth of this sector, which has been touted as important source of foreign investment and job creation.
Currently, only network operators can interconnect. This facility must be opened up to value-added networks (VANs). If the new regulations are interpreted in favour of VANS, they would be able to offer unconditional voice services and have the ability to self-provision and interconnect at predefined tariffs. But this would mean that network operators would lose ownership of their clients, which they obviously do not want to happen.
Interconnectivity is also a problem in the call centre environment today for two reasons: firstly, interconnectivity is not allowed, so who retains ownership of the customer with regards to the various traffic types? Secondly, the high cost factor also has an impact. There are two mindsets at work here. One says that interconnectivity should be deregulated; the other that complete deregulation will kill smaller players, which is not good for competition. Network operators derive a large percentage of their income from interconnect fees, so they certainly do not want deregulation.
There is also confusion around the question of "self-provision" by VANs, meaning their ability to obtain telecommunications facilities from entities other than Telkom and the second network operator (SNO). The market needs self-provision of telecommunications facilities. Without this, smaller companies either crumble or suffer real damage because they are not supplied with the facilities they need. It should be a customer`s right to lay their own networks.
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