Legal challenge could deter Vtel

8 Jan 2007

Legal action could see the winner of Kenya’s second national operator (SNO) licence walk away from the deal, which is worth KES12 billion (USD170 million) to the government. The Dubai-based Vtel consortium won its concession in October, allowing it to offer national fixed line, internet and wireless services, but the licence award has been delayed by a legal challenge from cellular licensee Econet Wireless. Econet wants the award halted until it sorts out its own legal problems; it claims that it holds the country’s third GSM licence but has been blocked from launching by telecoms regulator the CCK. Nairobi newspaper the East African Standard reports that the CCK is challenging the action, saying that Econet has failed to meet the requirements of its licence and that its case should not affect the award of the SNO concession. Kenya’s cellular market is currently home to two players, Safaricom and Celtel.