Econet rollout facing fresh challenge

17 Nov 2004

Kenya’s efforts to launch a third mobile network operator look set to grind to a halt once again following a filing from the Kenya Telecommunications Investment Group (KTIG), the unsuccessful bidder in the September 2003 tender, to stop the award on the grounds that the concession was granted to a company that did not actually participate in the tender process. In a low key ceremony held last week, Econet Wireless Kenya (EWK) was finally awarded the licence and given sanction to begin its network rollout programme. However, in its filing to the High Court, KTIG now asserts that the award of a licence to EWK, and not Econet Wireless Consortium (EWC) which tendered for and won the licence in September 2003, makes EWK a ‘stranger’ to the process. KTIG has therefore called upon the Kenyan authorities to halt EWK’s rollout until the matter is resolved.

KTIG is asking the court to re-run the tender process afresh, arguing that EWK could not be the company that participated in the tender as it was only registered in November 2003, two months after the licence was issued to EWC. Solicitors for KTIG also point out that the shareholders for each company differ significantly. In particular, they argue that while the Kenya National Federation of Cooperatives (KNFC) – a body deemed influential in securing the GSM award due to the political capital made from its association to ordinary Kenyan shareholders – is an 82% stakeholder in EWC, neither it nor anybody related to it has a material interest in EWK.

Kenya, Essar Telecom Kenya (yu)