|
VOIP OPENS NEW CHANNELS
BY AMENA BAKR
Sure, the world is becoming a global village faster
than you can blurt “VoIP.” Yet fences still stand between
village neighbors trying to keep in touch. In Egypt’s business
community, the need to circumvent these barriers, which include
regulation and technology lags, has sparked intense competition
among data companies to provide more efficient communications solutions.
At the center of the frenzy is the advent of VoIP technology, which
allows users to talk over digital data networks rather than by the
traditional analog signals sent over phone lines. The coming of
VoIP, along with the end of Telecom Egypt (TE)’s monopoly on
international voice traffic on December 31, 2005, creates an increasingly
untrammeled environment for business telecommunications.
Though regulations currently limit VoIP service in Egypt to organizations’
internal communications over virtual private networks (VPNs), the
winds of change are blowing. As an initial step towards deregulating
the telephony market in May 2005, the National Telecommunication
Regulatory Authority (NTRA) granted more than 10 of Egypt’s
data providers Class A ISP licenses, which permit them to provide
VoIP services over VPNs. “Now companies with multiple branches
can make [domestic long distance] calls at the cost of a normal
local call,” said Tamer El Shazly, Raya Telecom’s operations
manager. Raya recently joined Nile Online, Telecom Egypt, EGYNET,
TE Data and Nour Company in following in the tracks of LINKdotNET,
the first company to acquire the VoIP concession.
Prior to the NTRA’s granting of the Class A licenses, organizations
were only able to use fixed landlines or mobile lines to make calls
to their remote branches, incurring the respective telephone costs
of the calls. “Organizations that make a large number of calls,
such as banks, used to really suffer from the old system. Now through
VoIP they save a lot of money,” said Ahmed Ossama, product
marketing and government affairs director at TE Data, a subsidiary
of Telecom Egypt.
In addition, as voice and data could not be transferred simultaneously,
many organizations opted to maintain two separate networks, one
for voice and another for data transfer. “If a company had
a data network that cost £E 50,000 per month and another network
for voice that cost £E 25,000, [it] had to run both networks,”
El Shazly said. He explained that through VoIP, a company can save
money by using a single network to transfer both data and voice.
Suez Canal Container Terminal (SCCT) is one of the many companies
that has adopted VoIP for its internal communications requirements.
IT technical manager Mostafa Ahmed said the company is currently
using VoIP technology to facilitate communication between the crane
drivers carrying containers from one area to another with the operations
unit, which directs them to their destination. “Before we used
UHF devices in each of the cranes that cost £E 3,000 each,
but now through the use of VoIP we saved the company up to £E
75,000 a year,” he said. He explained that all SCCT crane drivers
wear headsets that are connected to the operations unit through
the company’s internal network, “In the end, it’s
all about saving money and VoIP has saved our company a lot.”
One important caveat: VoIP is, as of press time, legal only when
used intra-organizationally. In other words, the NTRA still considers
the use of VoIP in private homes, to make international calls or
even to contact clients an illegal act. Violators can be fined or
have their VoIP network shut down.
Yet this barrier too is crumbling. According to an NTRA official
who spoke to Business Monthly on condition of anonymity, a long-expected
international VoIP license will be granted to data companies within
the coming two months.
The international license will come none too soon. Already, many
managers are complaining about its delay. “The NTRA promised
to release the conditions for applying for the license in early
January, but as usual most of their promises are delayed for no
clear reason,” said Raya CEO Amr Abdallah.
“We said that the license will be available in Q1,” the
NTRA official countered. “We are still in that time period,
so we are not late.” He said the agency was still studying
the current market to determine the market’s potential and
the competency of data companies in providing the service.
Residual favoritism toward the state telephone giant, some experts
say, is behind the postponement. Until recently, the only entity
legally able to maintain an international telecommunications gateway,
Telecom Egypt, still controls virtually all fixed lines and submarine
landing equipment. For this reason, many in the field doubt that
TE will face significant competition in coming years in the international
calling market. “I don’t think that there is a company
out there today that has the resources and capital to compete with
Telecom Egypt,” Ossama said. “The copper wire used in
the lines is still monopolized [by TE].”
Once the international license is granted, as required by the World
Trade Organization (WTO), it is expected to have a positive impact
on the market by creating new arenas of competition. “The prices
of international calls will decrease as different companies compete
with each other to provide cheaper services,” Ossama predicted.
“This of course works to the advantage of the consumer.”
The NTRA has not publicly released any pricing schedules for international
VoIP service, but Abdallah believes that customers will have a wide
variety to choose from, “If I ask you today what is the price
of a call from a mobile phone you’ll tell me it depends what
plan you are using. The same will go for international calls –
there will be no unified answer.”
To escape from TE’s lingering grip on the international calling
market, many companies are already using free PC-to-PC and PC-to-phone
software such as MSN Messenger and Skype, a form of VoIP that operates
in the hazy recesses of Egypt’s legal code. The legality of
this practice is still unclear, as no law explicitly forbids it.
“The process of identifying the companies that use such programs
is very difficult, but that doesn’t mean that their use is
legal,” El Shazly warned.
An IT manager working for a US-based textiles and garments software
solutions company, who spoke to Business Monthly under condition
of anonymity, said that his company uses PC-to-phone software to
provide technical support for its software solutions to customers
in the US. “We’ve established a help desk here in Egypt
because labor is cheaper and through VoIP we’re saving on international
call prices,” he said. He further added that he does not consider
his company to be doing anything illegal. “Using VoIP internationally
is available for everyone, and there is no law here in Egypt to
prevent it [that is actually implemented], so why not use it to
our benefit?”
The NTRA official confirmed that the law does not proscribe the
use of PC-to-PC chat programs over the Internet. “The transfer
of data or voice over programs like MSN chat is entirely legal,”
he said. Such rudimentary programs do not much worry data companies,
however, even for the period after the license is granted. “The
Internet market is still not fully developed, and won’t be
for a couple more years,” Abdallah said. “Then it will
be the job of the data providers to offer competitive prices.”
His predictions about the benefits of competition notwithstanding,
Abdallah would welcome a more active NTRA role in regulating the
use of the license among companies that acquire it. “It’s
an impossible task for the NTRA to place restraints on voice programs
over the Internet, but they could at least make sure that companies
don’t misuse them,” he said.
Direct connections are another avenue linking Egypt more firmly
to the world of global business. Data companies have recently signed
deals to establish such direct links. Among them are Raya Telecom,
which established a connection to the Far East through a deal with
Malaysia Telekom and TE Data, which forged a similar alliance with
Telecom Italia Sparkle for a direct connection with Italy.
Companies that have activities in the Far East, for example, can
save considerable time by using these direct networks to transfer
data, voice, images and video. “Before we had direct [connections],
all our Internet traffic had to be transferred to the US or Europe
then to its destination, which caused a delay,” explained Raya’s
El Shazly. “Over the old system it took about 250 milliseconds
to transfer data to the Far East. Now with the direct link it takes
about 125 milliseconds.”
The difference might appear trivial, but it could halve the time
users spend waiting for data to be delivered. “This is very
important when you are dealing with financial transactions, since
timing is a very delicate issue,” Ossama said.
These advancements are part of a steady march ahead in Egypt’s
telecommunications market over the past decade. “The market
is moving 100 percent forward, and is becoming a free market with
the granting of all these licenses,” the NTRA official said.
“VoIP will be available to homes by the end of this year.”
Though the market shows strong prospects for growth, the services
currently offered by data providers remain modest. “The Internet
market here is not big enough and the regulator is too attached
to Telecom Egypt. This directly affects the service a customer receives,”
Abdallah said.
Experts hope to see a more balanced telecommunications industry
in the future, free from monopolies that erode competition. Providers
recognize, however, that for businesses making use of services such
as VoIP, the bottom line is still the bottom line. “In today’s
market it is essential that we enhance our communication channels,”
El Shazly said. “That’s what’s going to lead to more
investment.”
|
WHAT IS VOIP
Voice over Internet Protocol, or VoIP, refers to sending
telephone calls over data networks such the Internet instead
of the regular telephone network. Traditionally, telephone
conversations have been transmitted over public switched telephone
networks (PSTN), which use dedicated circuits to transfer
the calls from one operator to another. VoIP, however, uses
digital packet switching to transfer the voice messages via
IP networks such as LANs or the Internet.
VoIP also boasts a suite of auxiliary options, such as video
conferencing and receiving missed calls via e-mail, in addition
to standard phone options such as call forwarding, conference
calls and call bearing. The cost of VoIP services depends
mainly on the size of the organization and its existing internal
network. For most data providers, prices range between £E
50 and £E 100 per line per month. This flat fee goes
mainly to the rental of the soft switch that transfers the
calls, and does not depend on the number of calls made.
|
Submit
your comment
Top
|
