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Voice over Internet Protocol in SA 2008
World Wide Worx, January 2008
A sequel to the first study of the potential for Voice over IP among SA businesses, including a survey of 100 corporations, more than a 1000 SMEs. The 2005 study correctly forecast that VoIP would achieve limited takeup among small business during its first year of legal availability. The new study examines the impact of VoIP during the first two years, and provides a technology outlook for Internet Protocol in the telecommunications industry.
VoIP in South Africa 2008
Expectations for VoIP finally being met
At the start of 2008, the expectations for Voice over Internet Protocol (VoIP) first raised in 2005 (when it was legalised) finally began to materialise.
VoIP has taken off in corporate South Africa to the extent that half of all corporations are making use of it – but usually within the context of Least-cost Routing (LCR), which has been deployed by 60% of South Africa corporations. LCR enables any phone call made from inside the company to be routed via the most cost-effective route.
Among Small and Medium Enterprises, however, deployment of VoIP is still rather modest, despite LCR having been adopted at almost a similar rate as corporate adoption.
The use of VoIP (Voice over Internet Protocol) among SMEs for business purposes rose from 9% in 2006 to 18% in 2007, after rising from 2% in 2004 (before legalisation) to 4% in 2005, representing an effective doubling in each of the years in which it has been deployed among SMEs. In 2008, the expectations of SMEs are for dramatic growth in VoIP adoption, namely another doubling. Experience suggests, however, that such high expectations are rarely met off a high base.
A more realistic forecast would be for growth in VoIP adoption among SMEs to match the level of growth seen in 2007, i.e. to reach around the 25%-30% level in 2008.
The background to the research
In early 2005, all eyes in South African telecommunications were on VoIP, due partly to its deregulation on 1 February of that year, and due to the vast promise it held for reducing communications cost for individuals and corporations alike.
In its first report on VoIP in South Africa, released in January 2005, concluded that the technology was already in active use in large organisations, and such use would intensify, but that take-up among consumers and small and medium enterprises (SMEs) would remain muted for several years until seamless and bundled solutions, cost-effective broadband, and a clear value proposition were available.
This indeed proved to be the case. Many observers who had expected greater “fireworks” expressed disappointment in the take-up of VoIP during 2005 in particular, as well as during 2006.
However, the picture began to change in 2007, with broadband becoming more pervasive among existing Internet users, and VoIP beginning to attract SMEs in significant numbers.
Motivation and Methodology
With the looming advent of VoIP deregulation in South Africa in 2005, in 2004 conducted the first research into expected take-up of the technology among South African businesses. It has repeated the research every year since then to gauge actual take-up as well as expectations and impact of VoIP and satisfaction with its impact. This then allows for a strategic understanding of the take-up of VoIP in South Africa.
Three-stage research process to provide this understanding, namely:
- a detailed analysis of business and technology trends that are shaping the evolution of IP and being shaped by it;
- face-to-face interviews with decision-makers from 100 South African corporations, including more than 10% of the companies listed on the Johannesburg Stock Exchange;
- telephonic interviews with 800 small and medium enterprises.
The three phases of the 2008 study were conducted during the second half of 2007 and the beginning of 2008. Trend lines included in the report were developed from comparing the findings of similar research conducted in 2004, 2005 and 2006.
Early findings: the link between VoIP and LCR
VoIP emerged as a significant technology in South Africa in 2004, when 31% of surveyed corporations implemented it.
By contrast, in the Small, Medium and Micro Enterprise (SME) space, take-up in 2004 was a mere 2%, growing to only 4% in 2005, despite deregulation. The reason was simple: until 2005, VoIP could be used legally only within an organisation’s own network, thus saving costs for calls between branches and offices, but not breaking out into the broader telecoms environment. For SMEs, this option offered little benefit, as very few had the kinds of networks on which VoIP could legally be used.
While Voice over IP was one of the fastest-growing technology application areas in corporate South Africa in 2005, its adoption naturally slowed during 2006 and 2007 as a result of saturation. However, adoption was also far slower than predicted by corporate IT decision-makers.
1 EXECUTIVE SUMMARY
1.1 EXPECTATIONS FOR VOIP FINALLY BEING MET
1.2 THE BACKGROUND TO THE RESEARCH
1.3 MOTIVATION AND METHODOLOGY
1.4 EARLY FINDINGS: THE LINK BETWEEN VOIP AND LCR
1.5 THE LATEST FINDINGS
2.1 EXPECTATIONS FINALLY BEING MET
3 THE CONTEXT OF THE 2008 STUDY
3.1 THE TECHNICALITIES
4 MOTIVATION AND METHODOLOGY
4.1 THE BASELINE STUDY
4.2 THE 2008 STUDY
5 CORPORATE ADOPTION OF VOIP IN SOUTH AFRICA
5.2 VOIP DEPLOYMENT
5.3 IMPORTANCE OF TECHNOLOGY
5.4 IMPACT OF TECHNOLOGY ON THE BUSINESS
5.5 SATISFACTION WITH TECHNOLOGY
5.6 EMERGING TECHNOLOGIES
5.6.1 From 2008 to 2012
6 SME ADOPTION OF VOIP IN SOUTH AFRICA
6.2 TECHNOLOGY DEPLOYMENT
6.3 VOIP, LCR AND SIZE
6.4 VOIP IMPORTANCE AND IMPACT
6.5 LCR IMPORTANCE AND IMPACT
6.6 SATISFACTION WITH VOIP AND LCR
7 RESEARCH CONCLUSIONS
8.1.1 Software clients
8.1.2 Hosted services
8.1.3 PDA specific
8.1.4 Mobile phones
8.1.5 Server software
9 WHAT COMES NEXT? TRY UMA PHONES
9.1 INTRODUCTION TO UMA
Where can you get UMA service?
Who Needs UMA