Could we start with a brief background to ViewQwest?
ViewQwest was founded in 2001. It was originally an ISP focused on data connectivity in the central business district of Singapore. From there on the company started adding value added services such as managed VPN services, back up services, disaster recovery etc. Viewqwest made a niche market for itself in the financial services industry where we provide a lot of outsourced IP management services to merchant banks.
Tell us about your VoIP service.
Over the last two years we have been testing various VoIP platforms. In February last year a service called One Voice was launched. The One Voice service which is essentially targeted at the corporate market with people who have offices in Singapore as well as globally, the primary motivation is to replace existing PABX systems. We are using a hosted Centrex model.
What has been your experience offering VoIP based services?
There is essentially is a much longer sales cycle selling this type of services in comparison to data services because there is a significant lack of understanding or familiarity with what benefits a solution like this can offer. Another is that customers have invested in traditional phone systems and lack of inertia to change. They have invested in PABX systems which does the job for them. There are other people out there that offer them cheaper IDD services so why switch over. Issues like that.
There is another group of customers obviously who are more enterprising and realize the benefits of being able to communicate more freely. Then there is another segment of customers who are either relocating or establishing new businesses and these companies readily take up the services. They do so because we offer them hosted service and they don’t have to invest in the infrastructure.
Apart from that what are the weaknesses that you see in VoIP?
Essentially the system is highly dependent on the quality of the network and we have had situations where the customer is not connected to our network or the voice services so they may be using data pipe from another provider and in situations where there is a lack of QoS then the end user experience can be quite inconsistent. Obviously this also has an impact with overseas offices where the data pipe is not from us.
Also there is this perception of security risks where people are able to hijack your account.
So what are the main trends you see in the VoIP service market in Singapore?
Most of the VoIP operators in Singapore are not doing a replacement of existing infrastructure. They are actually doing a supplementation of existing infrastructure where they are putting in additional phone on the customers’ desk which would then allow them to make cheaper calls. Now the problem with that is not necessarily the technology but the operators who are entering the space. These operators are typically chasing the IDD piece of the business.
Your VoIP offerings are for enterprise segment. Do you have any plans to offer these services in the residential segment also?
We are exploring a consumer offering. We haven’t come up with one yet. The primary reason is essentially the fact that ARPU is a lot lower and obviously the support requirements are a lot bigger. As such we haven’t addressed that market but we do have traditional consumer products like the calling cards and call back services.
The uptake of VoIP in the residential segment has slowed down world wide. What reasons do you see here?
I think it goes back to the original issue of lack of familiarity or lack of knowledge of what VoIP can offer. Also in the residential space Skype does a very good job. It is free. Most end users who are technologically savvy would quite happily use it but for the users who are less technical you need to educate this segment of users about what is possible with VoIP.
The other issue also is that in many places the rental rates for residential subscription line is relatively low. In Singapore for example I think it is 13 Singapore dollars per quarter for subscription to a residential line. So the value proposition for a VoIP operator is almost none in that segment. But in other countries it makes sense. For example in Australia the monthly line subscription may be 40 dollars a month.