WAYNE SPEECHLY The reduction in termination rates can potentially drive further competition in the market across price and product offerings and increase the roll-out of alternative telecommunication services, such as VoIP-to-mobile and VoIP
The 50% reduction in the mobile termination rates between telecommunications firms to 20c a minute will promote increased competition in the rest of the industry, which could help to lower retail prices and increase access to services, says Internet services firm Internet Solutions cloud and communications executive Wayne Speechly.
The improved parity between mobile and fixed termination rates will support the move to convergence, which will drive more adoption of mature communication technologies, including Voice-over-Internet Protocol (VoIP), as well as video and IP-based services, he notes.
Price parity will force network operators and service providers to differentiate their product offerings and value-added ser- vices. This will offer greater variety to end-users and a range of benefits that include improved operational efficiency and enhanced collaboration capabilities, besides others.
“The greatest value from the reduction in interconnect rates will come from the increased innovation and competition it promotes, provided that savings from the reductions are invested in these areas. “Smaller network operators will now benefit from larger asymmetric interconnect rates, which can potentially drive further competition in the market across price and product offerings,” he says.
These reductions will likely impact on the network-derived revenue of the large incumbent operators, which could stifle their investment in the local market. However, the move will promote an increased roll-out of alternative telecommunication services for consumers and businesses, as VoIP-to-mobile and VoIP services gain a clear price advantage, says Speechly.
“However, a reduction in telecommunication costs will only be felt at consumer level if operators amend or adjust their retail rates in lieu of the drop-in input costs,” he warns.