[Kictanet] Econet fails to stop new rival

[alice at apc.org]

Econet fails to stop new rival 
By Judy Ogutu 


ECONET Wireless Kenya Limited has lost an attempt to block 
Communications Commission of Kenya (CCK) from issuing Vtel Consortium 
with a Second National Operator licence.

The company had gone to court last December, asking for an injunction 
restraining CCK from issuing the licence to Vtel that won the SNO bid 
last October.

Vtel won the bid at $169 million (about Sh11.8 billion).

On Wednesday, High Court Judge, Justice Alnashir Visram said 
granting "would cause considerable harm to CCK, the Kenyan economy, 
consumer and people of Kenya."

He added: "We would possibly lose $169m in immediate revenue from 
Vtel, we would send a dangerous signal to future investors that we do 
not believe in market economy and the freedom to make investment 
decisions without being stunted and stifled, and we would deny the 
Kenyan consumer the opportunity to benefit from competition in a free 
market economy."

Econet had rushed to court saying CCK's intended to issue Vtel with 
the license this month.

In its application, Econet argued that despite being licensed by CCK 
as the third mobile phone operator in October 2003, it had not been 
provided with frequencies to enable it roll out its network.

Through lawyer Mr Paul Ogunde, Econet accused CCK of preventing it 
from entering the market. Ogunde told Justice Visram that it was 
unjust to have Vtel licensed. 

The company said it would continue to suffer huge losses because of 
CCK's unwillingness to provide it the means to enter the market, 
while at the same time issuing a license to another operator to do 
the same business.

But CCK's lawyer, Prof Githu Muigai defended the commission, saying 
Econet had been unable to meet requirements for the award of the 
licence to operate as the third mobile service provider.

Muigai argued Econet had not participated in the tender for the issue 
of the SNO licence and, therefore, had no locus standi. 

The judge ruled Econet's argument was not tenable in law.

"Econet did not even bid for that licence. It is a total stranger to 
it, and whether it has the locus or ability to attack another 
person's successful bid is a huge question mark."

The Judge said it was not fair for the company to ask CCK not to deal 
with any other party instead of demanding specific performance of its 
contract.