Nashua Mobile preparing for LCR market shift
Nashua Mobile, the
independent telecommunications service provider in the
Reunert Group, is moving ahead aggressively with new
partnership agreements and the development of new products to
prepare for reductions in mobile interconnect rates over the
next three years.
The company is one of the
largest providers of least cost routing (LCR) solutions to
the market. Lower mobile interconnect rates could undermine
the business case for traditional LCR over the next three
years. Nashua Mobile is ready to help customers to make sense
of what this change in the market means for them and to help
them transition to new solutions and products when it makes
sense to do so.
Tim Walter, General
Manager for Product and Marketing, Nashua Mobile, says that
Nashua Mobile is already advanced in its plans to introduce
new products and services to its business as it prepares for
a transition in the South African telecommunications
The market might be
changing, but Nashua Mobile sees many exciting new
opportunities for its business, its customers and its dealers
as a result of more competition at both the service and
infrastructure levels of the market.
Says Walter: "LCR revenues
have already been impacted by a voluntary cut the mobile
operators made to interconnect rates from R1,25 to 89 cents
per minute earlier this year. Retail rates have remained
constant, which meant that we could still offer our customers
savings of around 20% on their cellular bills."
wants a further cut in the interconnect tariffs to 65 cents,
which is currently the topic of debate between the regulator
and mobile operators. If the retail rate remains constant,
LCR will remain a viable product," says Walter.
"In the longer term, Icasa's plans to force
interconnect rates down to 50 cents by 2011 and to 40 cents
by 2012 could result in LCR services becoming
All three cellular
networks are fighting against the new interconnect structure
that Icasa wants to phase in by 2012, which means that
interconnect tariffs may be reduced by a lower rate over a
longer period of time or that the implementation of the new
tariffs will be delayed by legal action from the
"Whatever happens, we
believe that interconnect fees will be forced down
dramatically over the next three years. That will have a
negative impact on our revenues in the short term. But in the
medium and long term, we will make up for lost LCR revenues
by introducing innovative new products to the market," adds
Walter says that employees
in the Nashua Mobile LCR division are already being trained
in new technologies to support the launch of new products and
services in the months to come. The company is also working
closely with its dealers to help them skill their employees
to resell new technologies and services it will soon
introduce to the market.
now, customers using LCR will still enjoy significant
cost-savings from the technology, but they will not be as
high they were in the past," says Walter.
Businesses should gradually phase LCR out when the business
case no longer makes sense to use the technology.
should be alert to the fact that they will be offered a
number of service and product offers in the months to come as
service providers scramble to protect their revenues. Many of
these offerings will not be as attractive as they appear,"
"For example, a customer
may be offered a seemingly attractive call rate on
it's telecommunications traffic that does
not take into account hidden costs such as line rentals,
minimum usage, and maintenance or administration fees that it
will have to pay. These fees must be added together and
divided by the minutes the customer will expect to use to
give a true reflection of what the actual rate per minute
will be that the customer will pay." says Walter.
Walter says that the
situation in the market is still so fluid that business
customers should be wary of entering long-term contracts with
service providers until it is clearer what the real impact of
lower interconnect fees will be on the market.
independent service provider, Nashua Mobile can help
customers to make sense of this complex environment and
choose the products and services that will deliver the best
value and cost-savings to their businesses," he