Wholesale voice isn’t dead, it’s evolving in the face of digital advancements
The wholesale voice market in South Africa is on a progressive journey driven by technological changes that have forever altered consumer behaviour. As with markets globally, revenue has been declining and wholesalers are turning to consolidation to find growth, but innovative new business models are emerging as wholesalers adapt to these new dynamics.
Voice under pressure
Since 2015, growth rates for international voice traffic have been in decline. In addition, the downward pressure on regulated termination rates, especially in the mobile market, has squeezed the sector to the point where traffic growth cannot keep pace with price reductions. And even with the relatively high cost of mobile data in South Africa, revenue growth from data falls short of the loss of voice revenue.
However, this pressure on the traditional wholesale voice business model looks set to increase, given the costs of buying and maintaining PBXs and soft switches as opposed to managed voice platforms and session border controllers (SBCs).
Meanwhile, the market share of OTT services such as WeChat and WhatsApp continues to grow – each offering a complete package of voice, messaging and video calls – and new entrants offering even greater convenience and ease of use continue to cannibalise this digital market. For wholesalers, it’s becoming more difficult to leverage the success of these services since integrating with OTT communication platforms is becoming increasingly complex.
In Africa, most countries don’t have large time-division multiplexing (TDM) or session initiation protocol (SIP) deployments. This means that these regions are ripe for a leap-frog scenario where infrastructure is adequate, allowing customers to move directly from legacy systems to a full, cloud-based unified communication (UC) platform.
Opportunities in scale
But it’s through greater scale that wholesalers can still readily achieve profitability, which can be realised through market consolidation. With the increased volume, on-net origination and termination are also increased, thus increasing profit margins.
Transit and interconnecting offer wholesalers the chance to reduce operating costs as well as the complexity of maintaining multiple interconnects, while also offering the opportunity to take advantage of multi-tenant core voice infrastructure.
Today’s wholesalers need to re-evaluate their business models to remain competitive and profitable, to diversify their offerings and lend more focus to customer experience than ever before. They need to tool up to meet new customer requirements such as OTT service enablement rather than focusing on PBX integrations. In the next phase, they can begin to consider different consumption models, i.e. unlimited and not usage-based.
Support through partnership
With IS as your partner, you can leverage our expansive infrastructure to transit and gain a strategic operational advantage with quick access to scale without the large capital expenditure required to go it alone.
IS offers its wholesale partners a scalable, fully interconnected, carrier-grade network with a redundant and secure Tier 1 routing and switching platform for world-class call quality and reliability, enabling high-volume call termination with origination to landlines and mobile devices. Find out more about the wholesale communication opportunities you could be tapping into by offering wholesale voice to your customers.
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