Wanjiru Waithaka
27 September 2005
Nairobi — Competition in VoIP (voice over internet protocol) calling card services is set to heat up following last week's entry into the market by Telkom Kenya.
The new 888 VoIP service for international calls was unveiled on Thursday at the launch held at the Nairobi National Park.
Consumers will enjoy the new service as part of the prepaid Telkom calling cards, now re-branded as the Telkom Big 5 Calling Cards.
Mr Levy Meitamei, brand manager at Telkom Kenya, says the new service will be the cheapest in the market with calls to international destinations like the US and UK for just 15 shillings per minute.
Currently, calls cost 90 US cents (peak) roughly equivalent to 92 shillings per minute and 64 US cents (off-peak), making the new service more affordable.
"We are targeting people who cannot afford the current rates such as university students and consumers who frequently make calls from cyber cafes.
"There's a huge demand for VoIP services and we expect significant revenues from the new service. In addition to expanding customer services, it will be one of the key services in turning Telkom around," explains Mr Meitamei.
Telkom calling cards were introduced in 2000 to address the pre-paid market, which could not afford to make calls using mobile phones.
The card was designed to allow consumers make calls from any telephone connected to a digital exchange, and with touch-tone capability, including those found in offices, homes, public telephone booths and at Telecentres.
The new VoIP service is expected to greatly enhance the card's features and target market, because consumers will be able to make international calls from any touch-tone phone and are therefore not restricted to cyber cafes.
VoIP works by transmitting voice data over the internet, just like e-mail. Although it is cheaper, the quality is not as good as international subscriber dialling.
Behind the Big Five campaign is the desire by Telkom to have a brand that Kenyans can identify with.
Each card will feature a pair of lions, elephants, rhino, leopards or buffalo - animals unique to East Africa and South Africa, says Mr Meitamei.
"We want to celebrate Kenya's heritage and beauty. Our objective is to boost domestic tourism. Since the cards will also be available internationally, we hope that people will see the cards and want to visit our game parks," he explains.
A picture of the Kenyan flag will be at the back of the calling card.
Mr Meitamei emphasised the affordability of the Telkom VoIP calling card saying there are no hidden costs as is the case with other VoIP services available in the market.
This was a veiled reference to Sema international VoIP calling card, introduced early this year in a joint venture between ISP Kenya and Canadian based BMT North America.
ISP Kenya and Telkom locked horns soon after the introduction of the card after the latter disconnected a line they issued to ISP Kenya Limited through which Sema card holders were able to make international calls, and thereby disrupting its services.
At the time, Telkom was accused by Mr Brian Longwe, the then chief technology officer of ISP Kenya, of blocking competition and denying Kenyans access to affordable communication while they themselves were not prepared to offer the service.
CCK tried to intervene and ordered Telkom to restore the service but was ignored forcing ISP to rely on mobile connectivity only for its Sema calling card.
Mr Longwe sees the entry of Telkom into the VoIP services market as a positive sign.
"The fact that Telkom has introduced their own VoIP calling card and is willing to work with resellers and other partners like Safaricom is an official recognition in government circles of the validity of VoIP technology," he says.
"Now we won't have the issue of legalities and there's bound to be healthy competition. Different players will have to compete based on the quality of services offered and affordability which is good for the industry."
To market its new service, Telkom plans to roll out a major promotions campaign including press, TV, and radio over the coming five months.
Road shows will be held in key towns including Nairobi, Mombasa, Kisumu, Nyeri, Nakuru and Garissa. The inclusion of Garissa is because Telkom recognises its market potential since many residents of the area have relatives and friends abroad and frequently communicate with them.
Another unofficially recognised area with huge potential is Eastleigh in Nairobi due to its high population of refugees who have numerous relatives and business dealings abroad necessitating frequent communication.
Although different industry players including Telkom and cyber cafe owners are agreed on the fact that the VoIP services is lucrative, precise figures on the size of this market are difficult to obtain.
Another way of looking at it is from the amount of remittances from Kenyans abroad to relatives back home. Conservative estimates put this figure at $600 million (Kshs 44 billion) through official channels such as Western Union. Then remember that these Kenyans frequently communicate with their friends and relatives in the country. Even a small slice of that is certainly worth going after.
It remains to be seen who will emerge tops in what will certainly shape up to be a hot battle for brand supremacy in this market.
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