Econet challenges Vtel award

6 Nov 2006

Two Kenyan cellular licensees which have still to launch are already preparing for a legal battle. Econet Wireless, which was awarded the country’s third GSM concession in December 2003, has not yet begun its network rollout due to financial troubles at one of its shareholders, the Kenya National Federation of Cooperatives (KNFC). But Econet is now reportedly considering going to court against the regulator, the Communications Commission of Kenya (CCK), to attempt to halt the award of a new combined wireline and wireless licence to a consortium headed by Dubai-based Vtel. Econet wants Vtel’s licensing delayed because it will impact on its own launch, which is finally expected to occur next year. Nairobi newspaper The East African Standard quotes Econet’s executive director, Zachary Wazara, who says: ‘We have been very patient and this is not the way we wanted to go but the [Vtel] licence will erode our opportunities to run the third mobile telephony service.’ The CCK wants the KES870 million (USD12 million) pledged in KNFC promissory notes handed over as its portion of Econet’s KES2 billion (USD27.7 million) licence payment to be paid in cash before it allocates spectrum.