Kenyan cellcos give LTE consortium the cold shoulder

15 Sep 2011

According to Business Daily Africa, the Kenyan government has been forced to extend the bidding period for its proposed Long Term Evolution (LTE) spectrum consortium, after mobile operators Safaricom and Telkom Kenya (Orange) proved reluctant to submit a bid for inclusion. According to the rules of the tender, published on 30 August, interested parties were given 14 days to register their interest; the deadline has now been extended to 27 September. As previously noted, participants wishing to enter into the open access LTE scheme must be at least 20% Kenyan-owned, ruling out Indian-owned cellcos Airtel Kenya and Essar Telecom Kenya (Yu) which are currently majority-owned by Bharti Airtel and the Essar Group respectively.

The government indicated that it does not intend to give the incumbent cellcos access to 4G spectrum; instead it called for the implementation of a public-private partnership (PPP), with a view to creating a Universal Access System (UAS) for all of the country’s telecoms operators. The single network, joint ownership plan was put forward as a direct result of the problems Kenya experienced when issuing 3G licences at staggered intervals; Safaricom acquired a concession for USD25 million in October 2007, only to demand recompense when late entrant Airtel Kenya (formerly Zain) was issued with a UMTS licence for USD10 million in June 2010. According to local press reports, the consortium is expected to be composed of Safaricom and Telkom Kenya, an unknown number of government officials, and representatives of international equipment vendors such as Huawei, Nokia Siemens Networks (NSN), Alcatel-Lucent and Ericsson.

Safaricom’s director of corporate affairs, Nzioka Waita, commented: ‘We were ready to submit our documents which are tailored according to the conditions given by the government on its Expression of Interests, and which we will now submit during the new closing window period.’ Meanwhile, Telkom Kenya has suggested that the two weeks extension will allow it to firm up a partnership, arguing the previous time frame was too short, given the legal and technical work required. CEO Michael Ghossein added: ‘We hope the government won’t require us to prove our financial capability to roll out the network at this stage.’ For its part, Essar Telecom Kenya has hinted that it will register its interest in the tender after it has secured local shareholder backing, but it seems unlikely that it will be able to do so by 27 September.

Kenya, Safaricom, Telkom Kenya