Switch Telecom is well known as one of the leading voice over IP (VoIP) and cloud PBX providers which has shaped the fixed voice market in South Africa.
The company now provides voice services to thousands of users across the country, but its journey to the top has not been easy.
MyBroadband spoke to co-founder Gregory Massel about his VoIP journey over the past seventeen years.
Switch Telecom’s history dates back to the early 2000s, when Massel had spent a decade in the ISP market.
“After a decade in the ISP industry, I wanted a new challenge,” he said.
“I am an entrepreneur at heart and despite working as an employee for many years after selling my first ISP business, I knew I would start another business when the time came.”
At the time, VoIP technology offered a new opportunity in the telecommunications market.
“VoIP is closely linked to Internet access and IP technologies, which allowed me to leverage my contacts, experience and knowledge,” he said.
“Most importantly, the time was right and the local telecommunications industry needed innovation.”
“After a decade of the government’s so-called ‘directed liberalisation’ policy approach, regulatory conditions were finally progressing to allow for genuine competition.”
Launching a competing service against a dominant landline provider like Telkom was not easy.
“Building a reputation was probably the hardest part. It wasn’t just that the company was new and unknown — the technology was also new,” Massel said.
“Our early competitors were also poorly implementing the technology, which tarnished VoIP’s reputation and made businesses extremely hesitant to adopt it.”
He used to joke that VoIP was a four letter word.
“At first, we called it strictly a ‘telecommunications’ company, avoiding references to ‘VoIP’ as much as possible,” he said.
“We had to work extremely hard to persuade potential customers that the technology, if implemented correctly, was inherently reliable.”
Switch Telecom found it particularly difficult to recruit corporate customers. It was much easier to break into the consumer and small business markets.
“Our first corporate clients all had decision makers who were initially personal clients for many months (sometimes years) prior, demonstrating that trust is earned,” he said.
Incumbent operators – both fixed and mobile – have also done everything in their power to crush competition and prevent new entrants from penetrating the market.
This continues to be a challenge, but is no longer an existential threat as there are now more players in the market and South Africa has a more mature regulatory framework.
For most entrepreneurs, there is a point when you realize the business will be successful.
For Massel, it was when he walked past a billboard of one of their first business clients and recognized the phone number as being from their allowances.
“There was a prominence and permanence about it that provided assurance that we were trustworthy in delivering communications for our customers,” he said.
“It also created a sense of responsibility to keep delivering.”
Thirteen years later, this client is still with Switch Telecom.
It is impossible to discuss the VoIP industry without mentioning Telkom’s stranglehold on the telecom industry in the 2000s.
ISPs have done a great job of breaking Telkom’s monopoly on data services. However, Telkom still largely retained a monopoly on voice services.
Traditional switchboards were expensive pieces of hardware, typically funded over three to five years and subject to ongoing maintenance contracts.
The costs of voice services were exorbitant and companies had to go into debt for years to finance a switchboard.
Switch Telecom’s goal, along with most other new entrants, was to provide affordable telephone calls and move the switchboard from a primary business liability to an ancillary cost.
After the introduction of geographic number portability, the industry saw an explosion in the adoption of hosted switchboard services.
Businesses have saved a fortune on capital expenditures and, more importantly, traditionally high-end features such as interactive voice response, call queues, and call recording have become mainstream.
“It changed the narrative because, by this point, costs had become so affordable that companies no longer cared about cutting or limiting their telecom spend,” Massel said.
“Instead, they were looking at how to use features and functionality to improve productivity and who they could trust to provide the best service.”
Innovation has become essential to deliver enhanced functionality, and as hosted services have become mainstream, infrastructure stability, resilience, and excellent customer service have become vital priorities.
In recent years, the ability to work effortlessly from any location and use a variety of media has become paramount.
“While our services have always been suitable for remote work, we have made them even better,” said Massel.
“For example, a WebRTC browser-based phone application is now fully integrated with our hosted switchboard service.”
The biggest change for Switch Telecom wasn’t new features or increased VoIP adoption. This was what was happening behind the scenes.
“Every day we make it our mission to incrementally improve small aspects of our business,” he said.
They also put a lot of thought and care into how they onboard customers. It includes quoting tools, customer service systems, online registration procedures, and fraud and credit checking.
They also improved service activation, automation of hardware provisioning, hardware delivery and shipping, technical support, and number portability integration.
“Looking back more than a decade, I’m amazed at how much the business has changed. This includes our turnaround times, the quality of our customer service and our ability to scale to meet demand. »
Switch Telecom is currently evolving for significant future growth, focusing on recruitment and upgrades to its core network infrastructure.
In the longer term, they plan to launch more services and features around the integration and unification of communication services.
Emphasis is placed on the convergence between fixed and mobile telephony and on the integration of these services with other applications.
The tech and business choices of Gregory Massel
What smartphone are you currently using?
Samsung Galaxy A52
What laptop are you currently using?
What internet connection do you have at home?
100 Mbps fiber through Afrihost and Openserve
What’s the best investment you’ve ever made?
My best investments have always been those that, in addition to being financially rewarding, have improved me or my life. From this point of view, the investments in my first company and, subsequently, in Switch Telecom, are definitely the best.
More recently, the installation of a hybrid solar backup power system has been transformative. In addition to being effectively self-funding, the elimination of the stress, frustration, and disruption previously associated with load shedding has made it as much an investment in my mental health and productivity as it is in the value of my home.
What’s the worst investment you’ve ever made?
Almost every penny I’ve ever entrusted to the bank.
What are you currently reading?
Startup Nation by Dan Senor and Saul Singer