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Senegal’s incumbent cellcos ‘boycott’ 4G licence tender; ARTP invites bids from new entrants

19 Jan 2016

Abdou Karim Sall, the director of Senegal’s telecoms industry watchdog, the Regulation Authority of Post and Telecoms (Autorite de Regulation des Telecoms et des Postes, ARTP), has announced that the call for applications for fourth-generation mobile licences in the country received no bids from the three incumbents – Sonatel subsidiary Orange, Tigo, a unit of Millicom International Cellular (MIC) and Sudatel’s Expresso Telecom – suggesting they may have boycotted the process over a disagreement on the licence fee. With the regulator refusing to revise its reserve price of XOF30 billion (USD49.86 million) for the 20-year concessions, the ARTP confirmed that on 17 December 2015 it received ‘in open violation of the Public Procurement Code and the consultation regulations (Article 3.4 and Article 7.14 of the Regulations of Call for Candidacy) … a signed letter [from the] three operators to report their concern about the licence reserve price’.

Mr Sall’s statement points out that the ARTP considers the licence fee to be appropriate, adding that it was set as a result of ‘a benchmark of over 20 countries in the world, taking into account the quality and quantity of available frequency bands (bands 700MHz, 800MHz and 1800MHz), the population, income of the telecom market in Senegal and obligations of the licence for 4G coverage. The ARTP recalls that the telecom market in Senegal represents over XOF1 trillion per year, with the rate of return (EBITDA) of operators of 20%-50%. The ARTP considers this price justified under the obligations of the licence, the market potential of 4G and the best international standards.’ He goes on to note that: ‘No formal request to postpone the date for submission of bids has been made by the operators throughout the process.’

In short, the ARTP is dismayed at what it acknowledges to be ‘the collective and coordinated non-participation of the operators’, and confirms it will take the necessary actions as a result of this shortcoming. Furthermore, the watchdog intends to restart the 4G licensing process, this time opening the call for applications to ‘new entrants [and] international telecommunications operators’ wishing to develop Senegal’s mobile market, suggesting too that the trio may have already ruled themselves out of participating and throwing into doubt the government’s planned commercialisation date for LTE-based services in the African state.

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