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Voice over data and lower mobile call prices

Mitchell's picture

In the future, voice will be carried over data, and consumers can expect significantly lower prices for voice calls over mobile networks when this happens. This is word from new Cell C CEO, Alan Knott-Craig.

Speaking during a Radio 702 interview, Knott-Craig said that it is inevitable that voice will be carried over data in the future. The timing will depend on sufficient data capacity on mobile networks, he added.

Voice prices will decline when voice calls are carried over data, simply because of the much lower price of data, said Knott-Craig. The lower rates will also require different mobile business models to accommodate the lower margins.

Knott-Craig warned that the quality of the voice carried over data may be lower than traditional mobile voice services, but expects consumers to settle for slightly lower quality if the price is much lower.

In South Africa, AppChat – a new mobile company founded by former ECN CEO, John Holdsworth – plans to launch a voice over mobile data service in mid-2012, promising to significantly reduce mobile call rates.

Holdsworth explained that AppChat has been set up with the specific purpose of passing on the benefit of reduced wholesale costs and lower interconnect rates to consumers.

“We want to make sure that the difference between R1.25 and R0.40 lands in the wallets of mobile subscribers, and not the coffers of incumbent mobile operators,” said Holdsworth.

“Ultimately mobile prices will fall, mobile traffic will increase, subsidies will be cut to the bone and mobile dealer commissions will be reduced. New entrants will acquire market share and the large incumbent operators will have to up their game in order to compete.”

“The rapid rollout of IP-based networks; the explosive growth of data-based services and devices; ICASA’s plan to implement wholesale open access; and lower interconnect rates will see the biggest change in the mobile market for 15 years.”