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2006-07-19 - Skype or Broadband Talk

Skype or Broadband Talk – either way, you'll save cash

By: Hilton Tarrant

Posted: Wed, 19 Jul 2006 07:00 | © Moneyweb Holdings Limited, 1997-2006

If you have high-speed internet at home or at your small business and you’re not using a voice over internet protocol (VoIP) product to make overseas calls or to dial cellphones locally, you’re unnecessarily paying Telkom too much.

Basically, VoIP technology converts voice calls into data packets and sends these across the internet. These are unscrambled at the other end and emerge as a normal voice call. Don’t lose interest if you’re scared of technology – all of the technical stuff happens in the background: you won’t even know it’s happening.

The uptake of VoIP gathered momentum late last year after it became legal in South Africa in February 2005. You may, in fact, be using a VoIP service without realising it.

The best-known internet telephony offering is provided by Skype, acquired by online auction giant eBay in October 2005. With around 7m users worldwide, Skype quickly gained notoriety because it was originally developed by illegal file-sharing site Kazaa.

There are two main Skype services: SkypeOut and SkypeIn.

Using SkypeOut, you can call anywhere in the world from the Skype application. Because Skype uses VoIP technology, you are billed a comparatively tiny amount for each minute of a call.

SkypeIn allows you to rent a dedicated telephone number that would allow people to call you, however this particular part of Skype is not available in SA yet as interconnection issues between the phone companies need to be sorted out.

Generally, you need a computer with speakers and a microphone to use Skype; however, there are stand-alone Skype phones on the market (some retailing at as much as R1000), but these are not yet commonplace.

Skype has gathered a niche following among South Africans who use it to call relatives based overseas. A good number of Moneyweb staffers use Skype to chat to their children who are living and working in Europe. With cameras attached, they can see their loved ones so far away. One disadvantage of the system is that you can only buy Skype credits using a credit card over the internet.

A local alternative to Skype, Broadband Talk, was launched by service provider MWEB last month. CEO Rudi Jansen described the free bundling of the service with MWEB’s monthly asymmetrical digital subscriber line (ADSL) subscriptions as “setting a new precedent for value-added services”.

In this case, as well as with Skype, you would still need to rent an ADSL line from Telkom – therefore not removing the fixed-line monopoly from the equation altogether.

The huge drawcard of Broadband Talk is that you use a standard telephone (even a Telkom handset!) to make calls. The only additional piece of equipment you need is a telephone adapter that you connect to your ADSL modem. This adapter is available at cost from MWEB for R550.

Calls charges are automatically added to your monthly bill from your internet service provider. With the MWEB service you can call other Broadband Talk users for free.

As a user of this service, you are also assigned a unique VoIP telephone number (in the 0877-range).

Just like Skype, people cannot yet dial you at your VoIP number. This will change once the interconnect regulations are altered, which Jansen and other industry players hope will be soon.

There is a further catch though: while there is no monthly subscription, you can only use the service if you are an MWEB subscriber.

Concerns have been raised about reaching a download cap by using VoIP, but using MWEB’s basic 1 gigabyte (GB) package (in other words, the amount of information you can upload and download is limited to 1GB in a month), Jansen estimated that you could spend around 250 hours on your VoIP phone before you reach your quota.

While Skype may be more than two thirds cheaper than the Broadband Talk product, MWEB seems to be counting on convenience to attract consumers. Jansen said that “research has shown that users don’t want to sit in front of their computers to make a phone call”.

Both products have the effect of essentially offering users a virtual second phone line (one person in the house could be talking to a family member in Durban while another could be chatting to an associate in London).

The savings to home and small office users are obvious.

Call charges start from 17c a minute for some Skype calls, to 60c a minute for international calls on Broadband Talk (see table alongside). Jansen said that international calls on MWEB’s service are “at least 65% cheaper than Telkom”.

For example, if you spend R600 a month on calls to your daughter in London, you would save nearly R390 if you used Broadband Talk and over R530 if you used Skype –practically erasing the bulk of your phone bill.

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