The new economy of voice

Go treat yourself to five minutes of free high-quality phone-to-phone call(s) from JaJah - from anywhere to anywhere. Behind the cute retro interface is a pretty standard callback service, with callbacks initiated from the Web. These services, a couple of years ago, initiated the driving down of international call costs. Even Telkom, the slow-moving dinosaur miraculously still alive in South Africa, got the point and in SA it is today often cheaper to call abroad than to make a domestic call from their phones because of the competition introduced through callback.

What does JaJah do? You provide two numbers (A and B, say) on the JaJah website, and their computer (one presumes...) places two calls in order to connect the parties. Why is this (and other callback services) cheap? If A calls B from a normal phone, A has no control over how the call is routed since A's telephony service provider will relay the call at a price previously announced to its customers. If A initiaties the call through JaJah, however, JaJah can use a (previously determined) point X from which the sum of the costs of connecting X to A and X to B is a minimum. The cost of the triangular connection is usually less than that of the direct call, in the same way that the direct flight from Johannesburg to London is hardly ever the cheapest ticket on the route (which was via Sofia for a long time).

Why might such a point X exist? Well, A and B can normally receive calls for free (US cellphones are the major exception) and hundreds of operators in different countries will have agreements with the operators of A and B respectively to accept calls from them. The operators are much more readily able to negotiate lower prices than end-users are and JaJah's job is simply to identify the operator with the lowest prices to A and B and route the calls via this lowest-cost operator X.

Why should traditional telephony operators be very, very afraid? If JaJah can connect my cellphone to practically any phone in the world for close to the price of a local South African call, why would I buy any service from Vodacom (my GSM operator) other than (practically free) incoming calls. Vodacom will be left to negotiate interconnect prices with other operators - its sole remaining source of income - and customers in the juicy local market for which it holds a license will provide practically no real income at all.

Why is this outcome likely? A service like JaJah needs very little information to connect A and B - just the two numbers, and the authentication of an account holder. Traditionally, this has been (partly) via caller ID, in traditional callback. There are nowadays very many ways of conveying this information - the Internet, SMS, mobile data services etc. - and operators already using them.

Callback operators perhaps need to make their services a little easier to use and they certainly have a lot of competion from pc-to-phone operators like Skype but for many applications callback remains a threat to traditional telcos - the very basis of which is free incoming calls and the great ease with which a few bytes of data (the two numbers) can be passed around the world.

This posting should not be construed as providing investment advice.


Nommer, asseblief nie!

MWeb het 'n goeie nuwe produk, Broadband Talk, vir die Suid-Afrikaanse mark bekendgestel. Ongelukkig is daar net één probleem met hulle Internet-telefoondiens - 'n mens sal uit alle lande dié 08770-nommer kan skakel van 'n gewone foon af, behalwe van SA.

Die rede hiervoor? OKOSA, onder wie se take tel „protecting consumers within the communications environment” wat hulle duidelik so goed doen dat mense nou amper glad nie meer kan bel nie...

Onthou dat dit OKOSA is wat die 08770-nommerreeks aan MWeb toegeken het maar blykbaar nie die tande het om die ander telekommunikasie-operateurs te dwing om oproepe na dié nommerreeks deur te skakel nie. Wat volgende? Bloemfontein word afgesny omdat Telkom besluit het hulle skakel nie meer oproepe daarheen deur nie? Verbruikers kan met reg wonder watse soort diens hulle van Helkom, Wou-daar-kom, en Selsie ontvang indien dié nie bereid is om hul oproepe deur te skakel na openbare telefoonnetwerknommers wat wettig in SA toegeken is, nie.

Hoe omseil ons die rotsrif genaamd OKASA (lees hier hoe dit dáár gaan)? Eintlik maklik. Al die voordele wat MWeb se diens bied kan in die VSA aangekoop word - teen laer koste en met 'n telefoonnommer (byvoorbeeld in Amerika) wat uit SA gebel kan word. Die enigste voordeel wat MWeb se plan het, is 'n plaaslike nommer - maar dit is 'n plaaslike nommer wat nie gebel kan word nie.


You will be assimilated

According to Business Day today

FOREIGN visitors entering SA will need to open up their cellphone and have its identity number recorded before they can use it here, if a proposed security measure finds its way into law.
Is this for real? Who will run the system and will there be a little processing centre at every border crossing with Swaziland? Rica (see below) rides again.


Big Brother Pretoria

According to Business Report of 2 June 2006, cellphone companies in South Africa might spend R300m (about $50m) to implement the Pretoria government's Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica). Not only must the telecommunications providers provide government access to phone calls if criminal activity is suspected, they must also now gather the personal data of some 20 or 30 million prepaid customers. In SA GSM simcards could up to now be bought almost anywhere you turn for R5 or so a shot. This has clearly been immensely useful to the great majority of people who simply want a convenient telephone service (which the government-owned - sorry, semi-privatised) monopoly fixed-line operator has never deemed a high priority. And - what do you know? - some criminals, perhaps even terrorists, have been using telephones! Something must be done.

Never mind the fact that 15m or so South Africans (teenagers, previously and presently very disadvantaged people etc.) do not have the identity documents that they will need to purchase or keep a simcard. Never mind that if the little lady from Letsitele has her handbag stolen at the Ultra City (because those criminals have not been thoughtful enough to call each other on a channel being monitored by the government) she will not be able to buy a cellphone and simcard to phone home because, you see, her ID document was also in the bag and she will wait many weeks for the Department of (Home) Affairs to issue a new one because they too are suddenly very vigilant against the threat of terrorists, foreigners and Zimbabwean political refugees.

What are the smart criminals doing, on the other hand? Parking their (consigliere's) behinds in the Internet café and chatting (encrypted) on Skype, Parlino or Wengo, one would presume. I hope the Zimbabwean dissidents are doing the same.