Voice over Internet Protocol (VoIP) providers are stepping in to fill the gap in telephony in South Africa created by the demise of copper-based networks.
Once South Africa’s dominant provider of analogue fixed-line voice services, Telkom has experienced a rapid decline in subscriber numbers over the past two decades.
Telekom fixed-line customers, including fixed-line and DSL users, peaked at around 5.49 million in 2000 but gradually decreased until around March 2015. At that point they were about 3.43 million.
It went downhill from there, with the company losing over 200,000 subscribers a year.
Annual losses peaked at 665,000 between March 2019 and March 2020.
As of March 2022, the company had just 997,000 landline customers left — a huge 82% reduction from 2000.
The chart below shows how Telekom’s fixed-line customers declined annually between 2000 and 2022.
There are several obvious reasons for copper’s decline.
Fiber has replaced DSL as the preferred form of fixed-line broadband connection as it is a faster and more reliable technology.
The rollout of fiber optic networks has also radically gained momentum in the last five years as multiple operators are active across the country.
At the same time, mobile devices experienced increasing acceptance, making landline connections obsolete.
Copper’s decline was also hastened by one of its greatest weaknesses – its vulnerability to theft and sale on the black market.
Network outages leave a bad taste in the mouths of consumers and businesses that rely on voice and Internet connectivity for their daily lives and operations.
Maintaining and protecting its network proved too costly for Telekom, and it actively switched off the copper infrastructure and replaced it with fiber.
Businesses still need a voice
As far back as 2016former Telkom CEO Sipho Maseko said that traditional voice telecoms are essentially dead and the company will focus on data-driven value propositions.
But that doesn’t seem to be the case if you listen Feedback from VoIP providers in South Africa.
Businesses need affordable language packs to facilitate communication between their employees and with customers.
As a result, companies like Euphoria Telecom, Switch Telecom, and Vox have benefited from telecom’s copper decline.
While analog voice is on the brink of extinction, voice communication will continue to be an essential part of business operations.
While VoIP was once notorious for its poor quality, Euphoria Telecom has CTO Nic Lashinger previously said MyBroadband that that has changed.
“Voice call quality in South Africa’s VoIP and mobile calling has advanced to the point where digital calls have largely overtaken analog channels in both the business and residential markets,” Laschinger said.
“We don’t believe in making a WhatsApp voice call today, something that would have been buggy and frustrating just a few years ago, for example.”
John Woollam, CEO of Euphoria Telecom, told MyBroadband that its PBX service subscription has grown 30% year over year since 2018.
Woollam anticipates continued growth as businesses seek cloud-based telephony so employees can log into business extensions from anywhere.
Once they come into effect, Woollaam believes the recently published ones Rules on non-geographic number portability will allow more businesses to move away from telecom and opt for VoIP services.
Switch Telecom director Gregory Massel said his company saw an exponential increase in demand for its services as the pandemic hit.
Massel argues that Telekom’s offer has become obsolete.
“For business use, subscribers have migrated from legacy and costly on-premises switchboards to cloud telephony solutions,” Massel said.
“VoIP providers have specialized in providing cloud telephony solutions for many years and have a significant competitive advantage over Telekom in terms of service offering, customer support and price.”