African VoIP report reveals steady uptake of ip among carriers and grey market persisting despite price falls

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This week sees the publication of Balancing Act’s African VoIP Markets. This 170 page report provides the first overall assessment of the use of VoIP in African markets that looks at both grey market traffic and the steady conversion to IP by incumbent fixed and mobile operators.

In order to give as fuller picture as possible of what is happening, the report’s authors have looked at all aspects of how VoIP impacts on African markets including: the structure of the African international wholesale market; the fall in international retail prices; the size of the grey market and the “value-chain” for grey market operators; the impact of legal VoIP on market structures and business strategy; the corporate transition to VoIP; the migration to VoIP and IP networks by carriers and ISPs; and the changing regulatory position on the continent.

The key findings of the report are:

- Despite considerable falls in international retail calling prices in many countries across the continent and the legalisation of VoIP in key markets, the existence of the grey market remains extensive in all African countries. The report provides retail calling prices for 2005 and 2006 as well as estimates of grey markets on a country-by-country basis.

- Grey market operators tend to be young, IT-savvy and capable of reacting to rapidly changing circumstances. In any other circumstances, these would probably be qualities that any business sector in Africa might find attractive. The report looks at how the grey market value-chain works and the ways in which operators divide up their markets.

- Where legalisation has taken place, the steady adoption of IP is driving changes in market structures with the entrance of new African VoIP service providers, particularly in Kenya, Tanzania and Uganda. Telco incumbents are seeking to adjust to new competitive circumstances by offering broadband and “triple-play”, both of which will fuel further adoption of VoIP.

- The adoption of IP by fixed line and mobile carriers is proceeding more quickly than might immediately be apparent. A significant minority of carriers are now using IP at the trunking level or plan to do so within the next 12 months. The shift at the trunking and local levels has been driven by broadband roll-out, the adoption of “triple-play strategies” and the use of fixed CDMA phones.

- There are currently eight countries where VoIP is more or less legal. 36 out of 54 countries and territories in Africa forbid the use of VoIP by regulation or by law. Of these 36 countries, 30 have only one international gateway. In the cases of Benin, Central African Republic, Sierra Leone and Zimbabwe, these countries have returned to a single international gateway licence in an effort to protect the revenues of their incumbents. The remaining six countries have either licensed an international gateway to a Second National Operator (SNO) or have licensed more widely to their mobile operators.

- In a section on VoIP Futures, the authors identify VoIP peering, enterprise peering and low-cost IP mobile as areas that will get traction in African markets. During the completion of the report, JINX announced that it would offer South African VoIP operators a platform for peering.

To see a full list of the contents of the report and a listing of its 28 tables, go to:

To order a copy and have it sent to you immediately electronically, go to: