MTN Business wades into fixed line market

By PATRICK GITHINJI

 

Communication provider MTN Business Kenya has entered into the fixed line market largely controlled by Telkom Kenya.

Its entry into the fixed line market was encouraged by introduction of unified licensing regime.

MTN Business Kenya Managing Director Tom Omariba said the new product line will target corporate clients.

“The future has brought with it the realities of convergence between data and voice, IP and GSM,” Omariba said.

“This has been largely necessitated by a growing desire by employees to want to work while on the go.”

The services will ride on MTN Core Network Infrastructure and a customised seamless Internet Protocol Private Branch Exchange (IPPBX) handset rather than the traditional PBX set.

The IPPBX handsets would be fitted with Voice Over Internet Protocol (VoIP) so as to deliver voice and video over a data network and help reduce long distance expenses.

It is expected that MTN’s new fixed lines, which will be customised to suit clients’ business needs, will help reduce capital expenditure, maintenance and total network cost.

He said the handsets would be available to the market only on lease to its customers so as to lock them in to stop them moving to the competitors.  While remaining guarded on the new network’s assigned prefixes, Omariba said local calls would be charged at a flat rate of Sh3 per minute, while calls to US will be $2 cents per minute.

 

Strong competition

He petitioned Government to introduce number portability exercise for the fixed line market, arguing that it will introduce competition to the sector.

A recent study by Frost & Sullivan showed that Sub-Saharan Africa has the lowest fixed-line penetration rate in the world, a situation attributed to low investments in copper-wire network infrastructure.

However, the three fibre-optic cable operators — Seacom, Team and Eassy — are expected to give fixed-line telecommunications a new lease of life and cater to the rising demand for data and broadband Internet services.

 The study noted that the fixed-line telecommunications market in sub-Saharan Africa earned revenues of $6.78 billion in 2008 and estimates this to reach $12.25 billion in 2015.

In 2004, the Communication Commission of Kenya introduced a new licensing framework, which allowed the provision of multiple services under a single licence.

This followed Telkom Kenya’s expiry of five-year monopoly on the provision of certain services.