1. The future of voice in Africa Russell Southwood, CEO, Balancing Act http://www.balancingact-africa.com Info@balancingact-africa.com

2. Grey markets as surrogate competition Whatever view of grey market it provides competition Price arbitrage Considerable size: Lesotho (17%); Sierra Leone (47%); Cameroon (30%); Average: 20-30% Fall in retail calling charges: 2005: 47 out of 54 countries US$1 a minute or over. 2006 19 countries charging US$1. 27 charging between US25-99 cents. 6 countries charging below US25 cents a minute If legal, arbitrage shifts from international to national

3. From no-go area to legalisation Originally viewed as a criminal technology that challenged the existing order Noisy advocacy by ISPs. Use of fibre networks by newer carriers Incumbents deploy international VoIP gateways. Tipping point 2004. No longer sustainable to protect existing interests. Ernest Ndukwe, Executive Vice Chairman of the Nigerian Communications Commission (NCC): VoIP “the engine that will drive telephony in developing countries”.

4. What is legal VoIP? The number of international gateways for both voice and data The existence of niche VoIP service operators The existence of workable and equitable interconnect agreements Longer-term: VoIP peering agreements Legal in 7 out of 54: Algeria, Kenya, Mauritius, Somalia, South Africa, Tanzania and Uganda. Anomalies elsewhere. Legal everywhere in five years or less

5. Changes in market structure Layered network model: VoIP in the service and apps layer Intro of IP has uncoupled services from transport and infrastructure New VoIP service providers “rent” the network like other operators through interconnect. From a small number of big players to big players plus many smaller players. Growth of local SMEs, owned and funded locally

6. The birth of the African VoIP service provider Living in the margin between wholesale and retail. Pressures to squeeze them out of existence. Got be more than a “briefcase” business Delivering more cheaply in local loop. Seeking to gain some control over its revenues. Increasing number of companies trading horizontally between each other.

7. Transition to IP networks Goes through four levels: international, national, local loop, user 25% of incumbents have intl gateway and IP connections in all African countries National trunking: About 20 carriers already doing. Further 10 in next 12 months. Local loop: Laying the groundwork. MTN testing Wi-MAX. IP-enabled Abis. User level: Cost of handset issues

8. VoIP Futures VoIP peering eNUM Mobile VoIP

9. Thank You Russell Southwood CEO Balancing Act http://www.balancingact-africa.com Info@balancingact-africa.com