Telkom fixed line decline

The end of copper-based voice — And the rise of VoIP – MyBroadband

Voice-over-Internet-protocol (VoIP) providers are stepping in to fill the gap for telephony in South Africa left by the demise of copper-based networks.

Once South Africa’s dominant provider of fixed analogue voice services, Telkom has seen a rapid decline in subscribers over the past two decades.

Telkom’s fixed-line subscribers, including landline and DSL users, reached a peak of around 5.49 million in 2000 but gradually declined until around March 2015. At that point, they stood at roughly 3.43 million.

From then, it was a sharp downhill drop, with the company losing over 200,000 subscribers per year.

Annual losses peaked at 665,000 between March 2019 and March 2020.

As of March 2022, the company had just 997,000 fixed-line subscribers left — an enormous reduction of 82% from 2000.

The graph below shows how Telkom’s fixed-line subscribers declined yearly between 2000 and 2022.

Telkom fixed line decline

There are several apparent reasons for the decline of copper.

Fibre has replaced DSL as the preferred form of fixed home broadband connection, being a faster and more reliable technology.

The rollout of fibre networks also radically picked up speed in the past five years, with multiple operators active across the country.

At the same time, mobile devices saw increased adoption, eliminating the need for landlines.

Copper’s demise was also accelerated by one of its major weaknesses — its susceptibility to theft and sale on the black market.

Network downtime leaves a foul taste in the mouths of consumers and businesses, who rely on voice and Internet connectivity in their day-to-day lives and operations.

Maintaining and protecting its network proved too costly for Telkom, and it has been actively shutting down copper infrastructure and replacing it with fibre.

Businesses still need voice

As far back as 2016, former Telkom CEO Sipho Maseko said that traditional voice telecommunications was essentially dead and the company would focus on data-led value propositions.

But that does not appear to be the case if one listens to feedback from VoIP providers in South Africa.

Businesses need affordable voice packages to facilitate communication among their employees and with customers.

As a result, companies like Euphoria Telecom, Switch Telecom, and Vox have benefited from Telkom’s copper decline.

While analogue voice is on the brink of extinction, voice communications will continue to be an essential part of business operations.

While VoIP was once notorious for its bad quality, Euphoria Telecom CTO Nic Lashinger previously told MyBroadband that this had changed.

“Voice call quality on VoIP and mobile calls in South Africa has progressed to the point where digital calling has largely overtaken analogue channels in both the commercial and residential markets,” Laschinger said.

“We think nothing today of making a WhatsApp voice call, something that even a few years ago would have been buggy and frustrating, for example.”

Euphoria Telecom CEO John Woollam told MyBroadband its PBX service subscription had grown 30% year-on-year since 2018.

Woollam expects to continue seeing this growth as businesses want cloud-based telephony to allow their employees to log into business extensions from wherever they work.

Once they take effect, Woollaam believes the recently-published non-geographic number portability regulations will allow more businesses to move away from Telkom and opt for VoIP services.

Switch Telecom director Gregory Massel said his company saw an exponential increase in demand for its services when the pandemic struck.

Massel argues that Telkom’s offering had become obsolete.

“For business use, subscribers have switched from aged and costly on-site switchboards to cloud telephony solutions,” Massel said.

“VoIP Providers have specialised in providing cloud telephony solutions for many years and have a significant competitive edge over Telkom in terms of service offering, customer care experience, and price.”


Now read: Voice resurgence in South Africa — what the spectrum auction will mean for VoIP services

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