Cheap mobile calls launched

The product, called PrimeTel-Cel, doesn't lock customers in to a long-term contract, but can be taken out on a month-to-month basis, as is the case with PrimeTel's ordinary offering.

It charges a R25 per month subscription, which will enable users to call for free to other PrimeTel and PrimeTel-Cel users, make much reduced calls to both landline and cellphone numbers in SA and abroad, and get a R5 per month rebate for making off-net calls (to numbers outside of PrimeTel's network).

The user must also pay the cost of data usage to his or her traditional mobile internet provider. But, Alter says each call uses such a small amount of data (250 kilobytes per minute, or roughly 10c to 12c per minute, he estimates) that this charge should not prove to be inordinate.

It also has special packages available for corporates, Alter says.

Alter says the extent of the customers' saving could be as much as 80% to 90% on their mobile phone bill. But, this would depend on their calling pattern and how many on-net versus off-net calls they made.

PrimeTel has partnered with Exactmobile on PrimeTel-Cel, because Alter says while it has experience in selling to the corporate market, Exactmobile knows how to sell to vast numbers of consumers. The application can be downloaded from either company's website, or the Exactmobile Wap site.

Mobile operators in some countries have attempted to block mobile VoIP applications from running over their networks, because this cannibalises their own revenue streams. But, Alter says offering customers mobile internet and then dictating how they can use this, amounts to "a form of censorship". He hopes the local operators will have enough foresight to realise this would not be in their customers' best interests.

PrimeTel's cellular offering is not a unique product; consumers can also download applications like Fring to their mobile phones (for free), to effectively make Skype calls from their mobile.

But Alter says there are a number differentiators.

Quality

Quality is perhaps the most important. With Fring, calls travel over the general internet, whereas PrimeTel routes its calls over its network, and has spent much time and effort ensuring the quality is good.

In addition, given that most freely available mobile VoIP offerings are from international companies, calls would be routed internationally, resulting in much higher mobile data usage than PrimeTel's application uses.

PrimeTel-Cel can be used on all Windows mobile or Symbian phones - of which Alter estimates there are roughly 3.5m to 4m in the South African market - and is compatible with the normal phone book. The user would merely need to add the prefix "27" to a number to call a fellow PrimeTel user.

PrimeTel first launched its services in June and Alter says the response has been much greater than it had anticipated, although he declined to release subscriber numbers at this early stage.

He says the recent High Court ruling in favour of Altech Autopage, which enables traditional service providers to also roll out their own transmission and backbone infrastructure is good for the industry.

PrimeTel itself has no intention of self-providing, but says the ruling means it will have access to many more facilities providers, which should bring down the price that it pays, and that would in turn enable it to reduce the cost to its customers.

Alter has successfully launched and run similar companies in four, deregulating Latin American markets in the past 17 years, before deciding the time was ripe to do the same in South Africa. PrimeTel is funded by US venture capital (three individuals with previously high-profile careers in the sector).

- Fin24.com