Seychelles issues first VoIP licence.

The announcement that a new service in the form of Voice over Internet Protocol (VoIP) will be available in Seychelles by early next year is raising expectations that consumers will be spoilt for choices and that phone tariffs will finally be reduced. But will this really be the case?

In announcing further liberalisation of the telecommunications industry, the department of Information and Communications (DITC) says, “it is expected that prices will be even more competitive and that both consumers and businesses will enjoy more choices.”

DITC has issued the first VoIP licence to the cable television entertainment service provider, Intelvision, bringing to three the number of Internet service providers (ISP) in that industry in Seychelles. The other two are ATLAS and Kokoket.

Consequently, Intelvision will, by means of its cable television network, be able to provide Internet and telephone services.

VoIP (voice over IP - that is, voice delivered using the Internet Protocol) means sending voice information in digital form in discrete packets rather than in the traditional circuit-committed protocols of the public switched telephone network (PSTN). A major advantage of VoIP and Internet telephony is that it avoids the tolls charged by ordinary telephone service.

According to the DITC, Intelvision can use its licence to provide a variety of marketing offerings which can be categorised into three groupings:
1. A product (such as a software program run on a personal
computer) with no ongoing provision of a service.
2. Corporate private networks, used for internal communication
within large companies, for sole use of that corporation
3. Publicly available VoIP services which are subjected to
remuneration.

The department explained that with the development of new services, which uses VoIP technology, the proper regulatory framework has to be put into place, to ensure Seychelles gain from all the benefits such as increased competition and the stimulation of new and innovative services for its citizens.

Hence all the publicities surrounding the new Broadcasting and Telecommunication (VoIP services) Regulation 2005 and the Licences (Broadcasting and Telecommunication) (Amendment) Regulation, 2005.

“In doing so, the department has recognized that a balance needs to be struck between creating the right conditions for deployment of VoIP services and ensuring that consumers are properly informed and protected,” the department said.

And so the battle continues.

The ongoing battle between Cable & Wireless Seychelles (C&W) and Telecom Seychelles Ltd (Airtel) to reign supreme as the islands’ leading mobile operator is strengthening despite “a challenging economic environment,” that’s forcing them both to dig deep to re-invest.

Just two weeks after Cable & Wireless Seychelles announced plans to invest in equipment and services with the aim of enhancing its all round mobile offering, its competitor Airtel is jumping on the band wagon also.

Both telecoms say their new investments will “bring telecommunications infrastructure in Seychelles to new heights, at par with the most advanced countries in the world.”

C&W is investing SR35m whilst Airtel is spending SR9m more in its advanced network.

Both companies are enhancing their Global System for Mobile (GSM) communication networks and prepaid services with a brand new GSM/General Packets Radio System (GPRS – 2.5G) mobile network, which is also third generation (3G) compatible.

During his recent visit to Seychelles the Chairman of the Bharti Group (Airtel’s parent company) Sunil Bharti Mittal says “the investment will put Seychelles onto wireless broadband highway ahead of most Asian and African countries.”

On his part the C&W’s Chief Executive Usman Saadat describes the positive results their customer will experience as a new era for mobile users in the country.

“The initiative to make mobile communications easier and more advance than ever before is all designed to ensure that telecommunications capabilities in Seychelles are up there with the best in the world,” says Saadat.

The new infrastructure will open a gateway to Multimedia messaging (MMS), WAP (Mobile Internet Browsing) Data Cards, Prepaid Roaming and advanced billing system.

By mid 2006, both Postpaid and Prepaid customers and roamers from all over the world can expect to see more attractive services and enhanced performance from the two companies.

Despite both companies committed approach in introduce advance services in the country, their clients’ greatest expectation is to see this battle resulting in further deduction in telephony costs.

2006 budget offered slim hope of a reduction in phone tariffs.

The annual budget has given little hope that phone charges will reduce in Seychelles in the year ahead.

In his budget speech to the National Assembly yesterday in his capacity as the Minister of Finance, President James Michel gave no clear indication of an adjustment in trade tax on post-paid phone.

However, the president welcomed recent reductions in rates for both local and international calls.

“Following initial negotiations with Cable & Wireless and Airtel, it is expected that there will be further reductions in the coming year,” the president said.

However, he stopped short of announcing any concrete revision in trade tax, like the 7% adjustment he announced on domestic air travel, for instance.

At present Trade Tax on Airtel post-paid bill is at 12% whereas that on Cable & Wireless stands at 17%.

Seychelles phone charges remain higher than in comparable countries, despite the current price war between the two telecoms – forcing some call tariffs to be cut. But critics say the country’s duopoly scenario in the telecom sector, if anything has over the years encouraged more of a cartel environment with very little benefits passed on to the consumers.

A first Quality of Service (QoS) report in the telecommunication industry published in October shows an increase of 28,000 mobile subscribers in Seychelles between the year 2000 and 2005:

Over 60% of the 54,000 subscribers are pre-paid clients who pay substantially more for their calls than wealthier contract consumers.

Whilst both companies have introduced post-paid packages for employees of large organizations, whereby they pay as low as 28c/min for mobile calls around the clock, Cable & Wireless’ pre-paid customers pay as high as Rs4.22/minute and those of Airtel Rs3.99/minute, during peak hours.

In addition to such exorbitant rates, the two companies still charge their clients per minutes instead of seconds. They also charge them for every three minutes, and not every minute, for fixed-line telephone calls.

But in announcing further liberalisation of the telecommunications industry early this year, the department of Information and Communications (DITC) says, “it is expected that prices will be even more competitive and that both consumers and businesses will enjoy more choices.”

DITC has issued the first VoIP licence to the cable television service provider. By early next year, Intelvision will by means of its cable television network, be able to provide Internet and telephone services.

To ensure its commitment to consumer protection I reckon the DITC ought to take the following actions:
·The introduction of more competition in the
sector,
·Ongoing “regulation of prices” and
·“Once-off reduction” of prices to an acceptable level
that reflects the (real) cost of providing a particular
service.

Although the country is making considerable progress in the liberalisation of telecommunications, critics argue as long as customer services organisations do not have proper channels or have the power to impose sanctions, cell phone tariffs will remain high in Seychelles.