SA COURT BATTLE OVER LEAST COST ROUTING TECHNOLOGY

Telecoms

Communications companies are back in court this week fighting for the right to help corporate customers slash their phone bills by using least-cost routing. MTN, Nedtel, Nashua Mobile and Orion Telecom have been taken to Pretoria High Court by Telkom, which is fighting to have the sale or use of least-cost routing devices declared illegal.

The practice lets a company fit a device to its switchboard to divert calls off Telkom’s lines and on to the cellular networks. It is so popular that about 90% of SA’s largest companies would be guilty of breaking the law if Telkom wins its legal battle. Thousands of smaller firms would also be guilty, since many companies have adapted their switchboards, according to the Independent Cellular Service Providers’ Association.

The cellular operators and service providers bill their corporate clients about R1.8bn a year for those calls, and say that the average company can slash 15% to 20% off its monthly bills. The devices, such as Nokia’s Premicell, route a call over whichever network is the cheapest, based on whether it is local or long distance, time of day and whether the destination is a landline or a cellphone number.

A fixed-line call to a cellphone will probably go from the switchboard to the Premicell, then on to a cellular network. Without that device the call would travel much of the way on landlines, allowing Telkom to charge for carriage.

Vodacom, which is 50% owned by Telkom, was initially cited as an offender, but Telkom dropped its charges after striking a deal to let Vodacom carry on with the service. That caused an outcry from the other respondents, since Vodacom was allowed to offer the service when legal action was pending against other players. They appealed, and Judge William de Villiers ruled that the final verdict on the legality of the service would apply to everyone, regardless of other deals.

Business Day