2006-12-26

Jajah zones - a gauge for telecoms efficiency?

Christmas day this year saw a notable first for South Africans - free calls, all day, on and between all networks, provided the call was initiated using the website of Jajah.com. In fact South Africans could make free phone calls using Jajah to landlines or cellphones in some 90 countries! Jajah is basically a callback service where one enters the telephone numbers of all parties to a proposed call on the website and waits for the telephones to ring, starting with the one initiating the call. Conference calls are supported automatically, of course. Jajah is not free but calls are the same price all day and the price depends only on in which of five zones a country is and (for most countries) on whether a cellphone is involved or not. For four countries (Canada, the USA, Singapore and China) the costing is independent of whether a cellphone is used or not and these countries make up Jajah's Zone 1.

Normally a Jajah call consists of two parts - each a connection to the country of the one party. The price of the calls therefore has two parts and the higher the zone number, the higher the cost of that part of the call. So, although the pricing on Jajah resembles that of the London Underground at first glance, in being based on zones, it is rather different because a call between Zone 1 and a Zone 2 landline is much less expensive than a call between two landlines in Zone 3. Jajah's free calls on Christmas day were between all phones in Zones 1-3, incidentally. The complete Jajah rates table gives further information and is stunningly simple by comparison to the rates information of most mobile or fixed-line telecoms providers. Note that Jajah provides free calls between the ordinary telephones of registered users in Zone 1 (all phones) and Zone 2 (landlines only).

The 36 countries in Zones 1 and 2 are simply those countries which have a telecommunications policy that delivers cheap calls to their citizens. The main difference between Zone 1 and Zone 1 countries is in the cost of cellphone calls and here readers who have followed developments in the telecommunications industry should note the position of the United States, which had always been thought a straggler in the cellphone world, in Zone 1. Supported by my growing conviction that simple and transparent indicators, preferably not provided by governements, are by far the best, I want to suggest that a country's zoning on Jajah is a very good indicator of the success of its telecommunications policy and industry. It is a very clear indication of the cost of placing a call in or two that country and the provider of the indicator (Jajah) can be fully trusted as they are "putting their money where their mouth is" by providing calls to a country at the rates applicable to that specific zone. The profit motive and competition will insure that Jajah put a country in as good a Zone as possible.

Sadly, South Africa (self-confident candidate for the UN Security Coucil and future Soccer World Cup host) currently languishes in Jajah's Zone 3 with the likes of Armenia, Bangladesh, Malawi and Laos. Perhaps we should count our blessings that we are not in Zone 4 (with Zimbabwe and Afghanistan) or the dreaded Special Zone (Cuba, Congo, Somalia etc.) but is it really where the country (16th in the world in electricity consumption and 27th in population) should be aiming? Our telecommunications regulators, monopolistic nouveau capitalists (you know who you are!) and government ministers are fond of emphasising the remoteness of SA - and is that not a delightfully eccentric Eurocentric interpretation? - in explaining the high cost of our telephone and Internet services. But, can they explain why we are in Zone 3 but Argentina, New Zealand, Australia, Taiwan, Thailand and Russia (so huge that it's remote and close to everything at the same time) are all in Zone 2?

Could ICASA and the Minister of Communication include a statement in their annual self-assessment on South Africa's position w.r.t. the Jajah zoning system and explain what progress has been made in moving to Zone 2? I hope so, and I am copying this blog entry both to ICASA and to the Ministry for their information.

2 opmerkings:

Frederik het gesê...

Hey Petrus,

thanks for your detailed post about our service and I'm happy that you like what we are doing. And you got it right, putting countries into zones is not a political decision from our hand side, it's based on rates we have to pay for the phone termination in specific countries only. If we have to pay less, our users pay less and that's what makes the zone.

Best regards to South Africa from Mountain View, Happy Holidays and all the best for 2007!

Frederik

Petrus Potgieter het gesê...

Hi, Frik.

Thank you for your comments and best wishes also to you in Mountain View for 2007. Keep up the good work! I should say that one of the things that I really like about Jajah is the simplicity of the pricing but - as an occasional amateur economist - I am (idly) curious about how people arbitrage between Jajah and POTS rates (especially during off-peak periods).

Petrus