TELKOM TURNS HEAT ON INTERNET PRICING

DAILY NATION
NATION STAFF REPORTER

Seven months after launching its commercial brand, Orange, and launching services on the GSM network, Telkom-Kenya is now revamping its Cable Division Multiple Access (CDMA) network, commonly known as Telkom Wireless.

The network, which offers voice and data services, was rolled out in 2006 and had slowly grown subscriber base to about 200,000 but faded from the limelight after Telkom-Kenya’s acquisition by France Telkom, and the subsequent launch of the GSM network.

Telkom-Kenya Senior Technician-Sales Donatus Owino explains to Ms Mukami Muriuki, a customer, how the new Orange Internet wireless Access works. The start up kit costs Sh3, 500 and the Internet connection is Sh2 for peak hours and Sh1 for off-peak a minute. Photo: Jenipher Wachie/Standard

The company is, however, banking on the CDMA network in realigning itself in the industry that has seen increased competition since late last year, which other than the entry of Orange also saw Econet Wireless launch its Yu brand. This brought to four the number of mobile phone operators.

"The launch of the orange mobile on GSM network was not the ultimate end. Telkom-Kenya is investing substantially in new products on different technologies to offer subscribers a range to choose from," said Mr Jean-Michel Chanut, head of marketing Telkom-Kenya.

The industry has also shifted focus from solely targeting the now near saturated voice market and efforts are being channelled towards provision of data services. Last week, the operator announced that it would be offering Internet services on the CDMA network.

Chanut said the network gives the company comparative advantage, as it is the only mobile network that has nationwide coverage.

Web access

"The industry has concentrated on offering Internet services to major cities and towns and somehow ignored the fact that in today’s world, Internet access is a necessity and the entire population of a country are in need of it," he said.

The revamped service, which has been renamed Orange Internet Wireless Access, will, however, offer basic connection and may not give users the advanced advantage of broadband connection offered by three of four operators; Orange, Safaricom and Zain.

Compared to the other services, the product is also cheaper with the plug in play modem retailing at Sh3,500. The pricing mechanism for Internet access is also different and subscribers will pay Sh1 for every minute spent online unlike the other services where users mostly pay for what they download.

Chanut said that though the service would cater for the basic Internet connection it would give a large number of people access to Internet. "Unlike broadband connection, this completely serves different needs and is targeted at the mass market," he said.

Among the particular segments that the product targets include students, home users, small and medium entrepreneurs and businessmen on the move.

"Everything in the economy is tending towards being electronic and Telkom has factored this in coming up with new products; that there is an increasing need for Internet access across board," he said.

Multiple technology

When Telkom launched its Orange brand on GSM, CDMA technology in Kenya seemed to be on the verge of death. Chanut, however, ruled out the possibility of the elimination if the technology locally and added that the future of mobile telephony would be based on multiple technology access.

"Even other operators will have at one point in time have to incorporate other technologies to GSM especially in handling both voice and data communications and increasing their footprint locally if they are to remain competitive in the long term," he said.

CDMA and GSM are the most prevalent cell phone technologies in the world. However, while CDMA has kept pace with the growth of the market, GSM has grown in leaps this decade to controlling the much of the market share. Other technologies, especially analogue ones, it seems are being slowly phased out.

"Players in other marketers are using CDMA technology to boost their GSM networks because of the comparative advantages like costs saving. For instance, where an operator needs three base stations for GSM, they would need one when they are on CDMA," he said.