A start-up telecommunications company has the country’s biggest guns in its sights as it slashes the costs of phone calls by offering a VoIP (Voice over Internet Protocol) service. Cape Town-based Yeigo is one of the first companies worldwide to offer VoIP for cellphones.
Yeigo, which is free to its subscribers, offers several advantages over current voice offerings:
cellphone calls from one subscriber to another cost as little as a few cents a minute per call;
calls from subscribers to non- subscribers are between 30% and 80% cheaper than current call rates;
savings on calls to non-Âsubscribers overseas are up to 4Â 500% cheaper; and
cellphone calls to landline non-subscribers are even cheaper than a landline to landline call using Telkom.
Yeigo, founded by three University of Cape Town graduates, allows users to save money by directing their voice calls via the data networks operated by cellphone networks rather than over the existing voice network.
“The inspiration behind Yeigo is to empower the ordinary person to make cheaper calls anywhere in the world. To give people control over how often they communicate and how much it costs them, by bringing friends on to Yeigo, they can tremendously cut down on their communication costs, and it is entirely in their hands,” says Rapelang Rabana, one of Yeigo’s founders.
Yeigo has a business model similar to that of Skype, which revolutionised the telecommunications sector by offering free VoIP calls from computer to computer.
Yeigo does not make any money on Yeigo subscribers calling each other but only when they call outside numbers. All subscribers have to do is Yeigo enable their phones by downloading free software. Not all cellphones can run the service, though. It is limited to high-end or smart phones.
Yeigo allows its subscribers to call other subscribers for free no matter where in the world they are — the only cost is the data rate levied by the mobile operator.
This data rate differs between operators, but a standard bundle rate is about R2 a megabyte. This translates into an effective call rate of 16c a minute using Yeigo.
This charge is even cheaper if the Yeigo subscriber is also a data bundle subscriber with one of the operators. A Yeigo spokesperson says that, depending on which package you have from which network provider, the effective call charge could be 50c a megabyte or 4c a minute.
With a price war going on between South Africa’s wireless broadband operators, data prices have already been slashed by as much as 61% and further price cuts are expected.
Yeigo subscribers will be able to make international calls to fellow subscribers for a fraction of the current mobile operator call rates.
For example, a VodaGo prepaid customer could make a one-hour call to a friend in the United Kingdom for a cost of R9,60 using Yeigo as opposed to R450 using Vodacom.
Yeigo not only offers savings on international calls, it is also cheap enough to act as an alternative to making local calls using a Telkom landline.
A five-minute call from your cellphone to a cellphone that is also Yeigo-enabled will cost 80c, whereas a five-minute landline call will cost R2,05 at current rates.
It also allows subscribers to call non-Yeigo subscribers at discounted rates but only by purchasing Yeigo credit.
Rabana says subscribers can save up to 30% when calling South African landlines or cellular numbers and up to 80% when calling international numbers. These are for calls by Yeigo subscribers to non-Yeigo subscribers. He said that subscribers can also save up to 90% on SMS charges through Yeigo.
Savings like this, however, are only available to customers who have high-end mobile handsets that can connect to the internet through wi-fi, Edge or 3G connections.
Rabana says that an entry-level Yeigo-compatible phone costs about R2Â 500 and that consumers can check the compatibility of their phone on the Yeigo website.
Yeigo does not charge subscribers a monthly fee, choosing to make its money from its margin on the Yeigo credit that it sells.
“Yeigo is here to pioneer [VoIP] here in South Africa. Like many new technologies, it is disrupting traditional revenue streams of GSM [cellphone] operators that will require the operators to re-engineer their business models so as to embrace this new trend and technology, yet still remain profitable,” says Rabana.
But the mobile operators’ views on the launch of Yeigo are unknown. Both Vodacom and MTN failed to respond to Mail & Guardian queries by the time of going to print.
Log on to www.yeigo.com for more information