Murray Steyn
Murray Steyn Executive Head: Wholesale

The telecommunications industry is undergoing a period of rapid evolution and many providers are feeling the growing pains.

There is a clear need to adapt to shifting market forces driven by technological change, but telcos must think carefully about how to reinvent themselves for a broadband world.

Pressures on traditional voice service providers

Telcos worldwide are facing the same set of challenges, and the pressures they face are increasing. Demand for IP voice continues to grow while markets for traditional voice services continue to experience decreasing margins and an increasing downward pricing curve. The decline of traditional voice is an inescapable reality, but the question of how soon (if ever) it will disappear remains to be seen. Regardless, wholesale voice operators are under pressure to reposition their businesses and some traditional boundaries are becoming blurred in response to these shifts.

The decline of metered telephony is reducing the need for complicated network operations and billing systems which are currently standard for the optimisation of routes and costs – this has the effect of lowering the barriers for entry. Simultaneously, over-the-top (OTT) services continue to revolutionise patterns of data consumption and are enjoying a voracious consumer demand.

No wholesale voice network operators want to find themselves in a situation where they are carrying a high fixed cost structure for a product in decline. There is a world of possibility beyond voice minutes, but the challenge is in deciding on which direction to follow.

Converged wholesale businesses

Wholesaler voice service providers are largely choosing the route of expanding and diversifying their businesses to include a broad range of services which could often be viewed, in a traditional sense, as retail services. These include managed services, mobile distribution and the entire range of communication services that connect global enterprises, including relatively novel concepts such as telepresence.

CEO of Belgacom International Carrier Services SA/NV (BICS) in Belgium, Daniel Kurgan, told the UK operations of Capacity Media that: “It is important for carriers to diversify, but it depends on what your mission is as to how you do that … We have to recognise every day that the border between wholesale and retail is blurring more. That border is less and less meaningful."

In South Africa, fixed line voice has always been seen as reliable. Then came MPLS (where some people doubted the ability to maintain the quality of service over an internet link). But fast forward to today, MPLS is a stable technology where voice services can be prioritised allowing corporations to have seamless and high quality communication. But with broadband, despite more bandwidth we lose that MPLS based control.  The real question is the mission critical nature of voice to your organisation? And the angle should be that IS provides both. Traditional MPLS based voice and a new world of voice over LTE and broadband to meet different market segments.

Focus on tailored solutions

It’s clear that wholesalers are now required to go a step further than the utilities space and focus on the end user to offer tailored services. Ultimately, wholesale voice service providers should focus on connecting people and providing custom-made connectivity solutions while adding value wherever possible with additional services. They can aim to reposition their businesses in such a way that preserves scale by offering services geared towards multiple price and quality points and a range of different applications that require wholesale transport.

Partnering with an established provider with a wealth of experience is the best option to offer world-class voice services to your customers at the most competitive prices. You can learn more about the opportunities by reading about why you should be selling voice. Or if you don’t feel like reading the article and would rather speak to us directly - leave your details here

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