NSN keen to roll out ‘shared’ infrastructure in Kenya

1 Aug 2011

According to Business Daily Africa, Nokia Siemens Network (NSN) is set to commence construction of ‘open access’ telecoms infrastructure in Kenya, with a view to leasing it to the country’s four mobile phone operators – Safaricom, Telkom Kenya, Airtel Kenya and Essar Telecom Kenya (Yu). The move comes as NSN seeks to diversify from its current network tender model, after coming under increased pressure from Chinese firms Huawei and ZTE in recent years. ZTE recently secured Telkom Kenya’s KES4 billion (USD43.4 million) 3G upgrade contract, whilst Safaricom has enlisted Huawei to roll out its Long Term Evolution (LTE) core network, in a deal worth around KES12 billion. In contrast, NSN’s involvement has been limited to a joint USD250 million deal – alongside IBM and Ericsson – with Airtel Kenya, to prepare the cellco’s network for 3G readiness over the next 18 months. Dimitri Diliani, Nokia Siemens’ head of African operations, told Business Daily: ‘We are looking forward to offering infrastructure that can be shared as it will be cheaper for firms to outsource rather than invest in individual networks. This is what will make us different from these Chinese firms both on quality and pricing’.

However, NSN is likely to face tough competition within the sector. As previously reported by TeleGeography’s CommsUpdate, in June 2011 Safaricom and Telkom Kenya announced plans to form a jointly-owned, independently-managed infrastructure company. The deal, which they said represents a ‘regional first’, is expected to be concluded within three months. Technical and financial representatives from the two companies are currently working on the finer points of the transaction, which is tipped to be modelled along the lines of an international tower company such as India’s Indus Towers consortium. Safaricom confirmed that the new company will seek to secure a separate Network Facilities Provider (NFP) licence from industry regulator the Communications Commission of Kenya (CCK), allowing it to operate on an ‘open access’ model. Going forward, the consortium expects to invite other players on board, either as shareholders or customers. The company will also seek to lease co-located tower space to any third parties wishing to install wireless communication equipment.