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VoIP leader Switch Telecom’s path to the top

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Switch Telecom is one of South Africa’s most successful voice-over-IP (VoIP) and cloud PBX providers and is now the preferred provider for thousands of users.

Over the last two years, Switch Telecom has shown exceptional growth thanks to its cost-effective service, which is easy to deploy and scale.

As companies realised things wouldn’t go back to normal, they had to get their businesses operating efficiently again in a remote working environment.

Switch Telecom’s VoIP and cloud PBX products are perfect for remote working, and the operator saw a huge uptake during the lockdown.

Switch Telecom director Gregory Massel told MyBroadband he expects the growth in VoIP and cloud PBX services to continue.

A big shot in the arm is the commencement of non-geographic number portability.

“Companies that have been tied to the incumbent because they didn’t want to lose their 0800 or 086 numbers now have the freedom to switch service providers,” Massel said.

“Telkom has been charging exorbitant pricing for their ‘SmartAccess’ services. Companies can now effortlessly port and save thousands of rands per month, overnight.”

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When looking at Switch Telecom’s success, it seems obvious that the world was always going to move to VoIP and cloud-based telephony products.

However, if one goes back to 2006, when Massel and business partner launched switch Telecom, South Africa’s telecommunications market was a very different place.

Telkom dominated the market, and there was a ban on VoIP services in South Africa until February 2005.

Even after the VoIP ban was lifted, many other factors made the provisioning of these services very difficult.

Broadband access and bandwidth were expensive, and many businesses were sceptical about adopting VoIP.

“It was difficult to convince clients to move from the incumbent, and there was a perception that VoIP would be unreliable,” Massel said.

The volatile exchange rate of the rand and service problems at Telkom further complicated offering a new VoIP service.

Despite these challenges, Massel and his business partner Shannon Swanepoel launched the new VoIP provider, Switch Telecom.

Regulations changing the game

It was tough going initially, but things changed in 2008 when regulatory changes helped VoIP providers to obtain their own number ranges and interconnect with major licensees.

These regulations helped Switch Telecom to gain credibility as an operator, removed volatility in pricing, and enhanced call quality.

The subsequent court ruling in the Altech case, which opened up the telecoms market in South Africa, further cemented public opinion that VoIP was here to stay.

“We were no longer just a thorn in Telkom’s side that could be removed and set aside. We were here for good to change telephony for the better,” Swanepoel told MyBroadband.

Switch Telecom enjoyed strong growth in rural areas where businesses only had wireless connectivity in the early days.

“These clients were unable to use mobile phones as the signal in these areas was poor or non-existent, and Telkom had stopped offering fixed-line services to them due to copper cable theft or damage,” Swanepoel said.

The next phase of their growth came when broadband access became widely available and more affordable.

“Clients started to approach us — either through referrals or through our reseller channel — to port their numbers and move to a more affordable VoIP solution,” she said.

The VoIP started to grow, and so did the product offerings in the South African market.

“Initially, our hosted switchboard solution was a value-added product as we focussed predominantly on VoIP lines and handsets for home users and small business,” she said.

The commencement of geographic number portability triggered Switch Telecom to launch a premium hosted switchboard solution.

The solution gained traction as many businesses did not want to sign long term and costly contracts with PBX vendors. They also realised that managing a PBX in-house was not optimal.

“Over the years, we have grown, evolved and matured. We no longer just provide VoIP services to bring down costs — we offer cost-effective communication solutions,” Swanepoel said.

Gregory Massel


Gregory Massel

The growth of VoIP providers came at a time when Telkom saw a significant decline in fixed-line subscribers and fixed voice minutes carried over its network.

The future also does not look good for Telkom.

Massel said he does not think there is a future for Telkom’s traditional fixed-line business.

“Telkom itself has started to offer products that compete with their fixed-line offering. Copper theft is rife, and Telkom is not replacing infrastructure that has been stolen or damaged,” he said.

“Furthermore, bandwidth and Internet connectivity is becoming very affordable, and even in the poorest homes, someone has a mobile phone.”

The future for VoIP providers, like Switch Telecom, looks rosy despite the growth in mobile phones.

“Mobile might be growing, but it is still expensive. We still have a large home user client base that is growing each month,” Massel said.

“With the use of softphone applications, our clients are also able to use their VoIP service on their mobile phones. It gives them mobility and a cost-effective way to make and receive calls.”

Massel expects their biggest growth to come from the business sector.

“More companies are moving to our hosted switchboard solution. We are constantly developing add-on-features to our systems that allow for ease of management and functionality that is not available on legacy switchboards,” he said.

Source: MyBroadband

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