VoIP flourishing despite bandwidth limitations

The recent takeover of Skype by Microsoft makes for good headlines, but the transaction is a bit of a red herring when one is analysing global VoIP and IP telephony trends. Ultimately, Microsoft’s move is less a VoIP trend marker than a sign that the global giant is looking for ways to secure market share in an area it highly considers — business communication.

Given our well-articulated bandwidth issues, the big question in the South African economy is whether we are likely to follow global VoIP trends, or whether the cost of connectivity will see us lagging the global market.

Microsoft aside, there’s no doubt VoIP and IP telephony are taking off globally. According to Infonetics Research, the residential services segment remains the largest of the global market at 69% of total revenue, while business VoIP services are growing fast. Infonetics predicts the combined business and residential global VoIP market will reach an impressive $74.5 billion by 2015.

Currently, there are two distinctly different scenarios when it comes to VoIP uptake in the South African corporate environment.

Firstly, companies looking to shift existing infrastructure from non-VoIP to VoIP are facing a lengthy and complex process. Significant additional costs around networking and cabling have to be considered, while developing a basic understanding of how to approach and manage the transition is no easy task considering the many legacy issues at play. Large corporations with ready access to the required budget can move swiftly, but for the rest detailed exploration of the VoIP pros and cons is required to successfully negotiate the operational complications and capital outlay.

This is in stark contrast to new ICT systems and / or green field projects. Here, the VoIP uptake has been immediate and dramatic. New VoIP systems are far cheaper than traditional digital and analogue options, and spend on VoIP contact centre architecture also generally comes out lower than any other alternative.

The cost breakdown is decisive and can deliver savings of as high as 40% to 50%. For a new business that kind of saving is unequivocal. In addition, VoIP can be a game changer in areas we have become accustomed to struggling with, such as setting up high quality single system communication architecture across geographically disparate locations. Another benefit is the ability to centrally control, manage and view the entire solution across all these locations.

Also, education is a crucial element in the South African VoIP sector at this stage. Many decision makers still perceive VoIP to require intense effort in terms of administration and organisational governance. This perception can actually be pretty far off the mark. VoIP systems are cheap to run, maintain and control; providing the company concerned has developed a detailed understanding of how to migrate to VoIP or install a new VoIP system.

Does South Africa lag significantly behind the US and Europe when it comes to VoIP uptake? In terms of the basic cost of telecoms infrastructure our lag is undoubtedly true, but when it comes to what’s happening inside our glass offices, my day-to-day experience is that we’re right up there with the global leaders. While hindered significantly by the basic cost of telecoms, the South African economy has the skills, the tools and the general ability to adopt VoIP as fast as any other country.