[Kictanet] Fw: [DigAfrica] VOIP is a Challenge for Telephone Firms in Kenya

[alice at apc.org]

VOIP is a Challenge for Telephone Firms
> The Nation (Nairobi)
>
> COLUMN
> August 16, 2005
> Posted to the web August 15, 2005
> Pauline Wangui
> Nairobi
>
> It is now official. The Communications Commission of Kenya last week
> issued guidelines for the provision of voice over internet protocol
> (VoiP).
>
> Going by the Commission's definition, VoiP is the transmission of
> voice as packets over traditional switched networks or over internet
> networks (a telecommunication service whereby voice messages are
> transmitted as packets over the internet or other telecommunications
> network).
>
> This means that VoIP is finally taking off and the prospect of
> internet telephony displacing traditional telephony is now a reality.
>
> VoiP kills distance, and is of great interest within the telecom
> industry. With VoiP service, subscribers have an opportunity to
> significantly reduce their local and long-distance calling expenses,
> while long-distance carriers have an opportunity to possibly avoid
> sharing a large portion of their revenues with the local telephone
> companies for use of their access links.
>
> Moreover, VoiP enables a rich array of services ranging from web-like
> phone displays, information services, and data exchange.
>
> This is a transformative technology, that will redefine the phone and
> the way people use it.
>
> As more businesses and consumers adopt the lower-cost alternative of
> VoIP, the normal carriers will be forced to lower their wireline
> intercarrier tariffs in order to compete.
>
> Already, large companies like Time Warner Cable have experimented VoiP
> service within their various service territories over the past year.
>
> Although regulation for VoiP is still being defined, operators
> including incumbent Telkom Kenya and new entrants can now incorporate
> VoiP as long as they have been licensed.
>
> However there are key business issues to be addressed.
>
> The bottom line is that for this or any technology to flourish, there
> must be a sustainable business model behind it. The door to the inner
> core of telecommunications has just been opened to innovators willing
> to expand on relatively simple technologies of digitizing and putting
> voice in packets.
>
> This ability enables a new paradigm in the telecom sector that is
> really just beginning. But are the traditional voice carriers ready to
> deal with VoiP at operational levels, are they prepared and are they
> capable of managing a successful migration?.
>
> Companies like Net2Phone and Vonage press ahead with new business
> models. New comers like Skype and Free World Dial-Up drive innovation
> and integration of new uses.
>
> Collectively such consistently reshape their markets by adopting new
> business models that provide for layered services like voice, data,
> video, audio and internet. Such innovators can and will erode the
> revenue base that the telecom industry fights so hard to hang on to.
>
> Corporate strategy will have to be reconsidered and decisions made
> about the new position in the new voice market.
>
> Flexible and effective management information systems have to be put
> in place in the new environment. Migrations plans must be put in place
> to ensure that the migration to VoiP is both operationally and
> financially successful.
>
> Telcos must move fast to position themselves in the VoiP value chain.
> They are used to focusing on maximizing returns from their current
> infrastructure.
>
> However, with many new VoIP entrants expected in the market, the
> traditional operators cannot afford to sit back as simple
> infrastructure providers but need to effect strategies that maintain
> their positions. They need to work out how best to position themselves
> in this new IP-driven value chain and assess the impact this will have
> on their already existing business.
>
> They also need to know how they intend to deal with new alliances and
> partnership with applications and content providers as they maintain
> customer s during migration.
>
> Among the main issues operators will face in the transition are costs
> and success of customer migration.
>
> Extensive investment is required. Risks associated with migration need
> to be addressed.
>
> VoiP-specific issues, such as voice quality and customer churn have to
> be looked into.
>
> With VoiP, the market battle is expected to intensify. What IP
> services do consumers want? Who can best deliver them?
>
> Who can build a sustainable business model, and who will continue the
> evolution by keeping the pressure on all the players to innovate.
>
> These are just but few issues. In telecommunications, you lead, follow
> or get out of the way. You can be a steamroller, or you can become
> part of the pavement others walk on.
>
> But if you are, innovative, and creative, you can outrun the telecom
> industry that is still slow in this region.
>
> The writer is a telecoms strategy analyst.
>
> http://allafrica.com/stories/200508151302.html
>
>
>
>
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