Ruan Mallan, CTO of Telfree portrays his company as a virtual VoIP company, offering free calls between Telfree users and cheap international calls over any type of internet connection (ADSL, Wireless, 3G, GPRS, Satellite, Dial up or Leased Line). The service is targeted at end users as well as small and medium businesses, which generate the bulk of calls in terms of revenue and volume in South Africa, writes Balancing Act's Isabelle Gross.

Is this just another VoIP offer entering the South African market following the deregulation of the telecommunication sector or is there more to it? Telfree’s VoIP solution is based on allocating a unique number to each of its customers, enabling them to make outbound calls but also to receive inbound calls using an IP phone, a gateway or a USB handset with their soft client. Alongside roaming capabilities Telfree offers voice mail facilities and call forwarding options for a small monthly fee.

For most end users, cheap or free calls are all they care about. They do not really care how these calls get connected. From the service provider’s point of view, interconnecting is a bit more complicated. There are two key aspects: it is about both local interconnection and international connection. Ruan Mallan reckons that interconnection for international destinations is easy. Telfree works with Tele2 and other tier 1 US carriers, with which it has signed agreements to carry inbound and outbound traffic. It is on the domestic side that matters are moving forward at a slower pace. Although the license and the underlying interconnect agreement have received the go-ahead from ICASA it seems that Telkom is slow at rolling out the interconnection with Telfree’s local infrastructure. Nevertheless Telfree is already running some business customers on demonstration.

Despite all these delays Ruan Mallan is confident that Telfree’s service will take off in South Africa. The company currently has 7,000 numbers available. In 12 months’ time Ruan plans to run 10-15,000 numbers on Telfree infrastructure and make the service a known brand in SA. He reckons that a good pricing strategy combined to an innovative service offer will be key to positioning the company in this market.

Telfree’s ambitions don’t stop in South Africa. Ruan explains that once the service has met with success in South Africa Telfree plans to expand in neighbouring countries and up North in Ghana and Nigeria through a partnership/joint ventures with local carriers and private entrepreneurs, whereby Telfree will provide the technical support and marketing experience. Telfree’s expansion plans are not only geographic; as the telephone service takes off they want to provide more value added services such as video conferencing and TV over broadband. This might be a good move for the future as call revenue is shrinking fast.