KDN ups stake with new voice unit [Business Daily (Kenya)]
(Business Daily (Kenya) Via Acquire Media NewsEdge) Telecoms firms offering voice services are braced for stiffer competition after the new owners of Internet firm Kenya Data Networks (KDN) said they were entering the market in search of a new stream of revenues.
KDN that recently re-launched as Liquids Telcom Kenya after the 80 per cent acquisition by the Mauritius firm said the firm was changing strategy to offer home Internet and entertainment content.
The firm will offer fixed line services through the Internet, where on-net calls will be free. Charges for calls to other networks will be released during launch in the first quarter of 2014.
The new strategy by Liquid is expected to pile pressure on Telkom Kenya, the dominant fixed line provider, Wananchi, the owners of Zuku brand who offer Internet, voice and video to homes (triple play) and MTN Business who also offer similar service through internet.
Telkom Kenya charges Sh2 for calls made within its fixed network and Sh3 to other networks while MTN Business, which introduced the service in 2011, charges Sh3 per minute to Telkom Kenya's fixed lines, Sh4 per minute to the mobile telephone networks and no charge within its network.
"We are targeting between 5,000 to 10,000 homes with our bundled services (voice, broadcast and Internet) and will be investing $5 million to roll out the services, this is part our new strategy to broaden revenue stream," Shahab Meshki, Liquids Telecoms Kenya CEO said in an interview with Business Daily.
"We are currently talking with content providers and come up with better offerings in the market as we would not like to copy and paste," he said.
The VoIP fixed voice service is offered through the Internet and subscribers can receive and make calls through computers and desk top phones. For entertainment, KDN said it would offer sports, music, and education content on demand.
In 2010, KDN pulled out of the retail market in a move that was seen as a tactical retreat to give the ISPs, which are its main customers, room for growth, limiting its revenue stream mainly to provision of wholesale Internet connectivity.
The small Internet service providers, including its sister company Swift Global, had been hard-hit by the entry of top-tier companies such as KDN into the lower segment of the market.
However after the buyout by the Mauritius firm, the new owners merged KDN and Swift Global giving it a bounce back to this market segment that is becoming more competitive.
Other than MultiChoice, Zuku, and StarTimes who are already in the payTV, Microsoft is also eyeing the home entertainment segment.
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