[kictanet] [Skunkworks] Kenya's state-owned telecoms operator goes mobile

[Mike Theuri]

Telkom is a licenced operator using fixed wireless technology. The key word
here is fixed. On the same argument if the 'true mobile' operators want to
obtain 3G and 3.5G frequencies the regulator has a duty to ensure that the
government is not deprived of much needed revenue by holding a competitive
tender or auction for the 3G frequencies which have fetched hundreds of
millions of dollars in other African countries.

----------
https://www.ntra.gov.eg/english/News_NewsDetails.asp?PID=36&ID=94

Vodafone Egypt have agreed to pay LE3.34bn (US$584m) + 2.4% of total
revenues as a licence fee for 3G spectrum. Vodafone Egypt recently declared
an annual turnover of LE6.8bn and revealed that approximately 22% (LE1.5bn)
of this will be Free Cash Flow.

However, it is not as much as the third player, Etisalat, agreed to pay
LE16.7bn (US$2.9bn) for a 2G/3G licence which was equivalent to 3.4% of
Egypt GDP.
----------

It is indicative that at least one mobile provider has indicated that it is
already using such technology, which per their original GSM license (Annex
A) is not catered for. What payment if any has been received by the
commission on behalf of the government for these frequencies by the mobile
operator and for the issuance of a new 3G licence? I am certain that TKL has
met its licence obligations and thus is a bonafide operator, secondly TKL
holds a licence that allows it to provide these services nationwide in
addition to its basket of licences. If the TKL's competitors want to demand
that TKL pay fees for a licence (which it already has) then they should
similarly be prepared to pay licence fees after competing in a tender to be
able to operate 3G networks.

Mike

On 7/20/07, Joseph Okech <okechukwu at gmail.com> wrote:
>
> I don't think Telkom goes mobile is a problem & its never about
> competition,
> the problem is with the regulatory infrastructure in place to be honored,
> that is if all mobile operators have to pay a mobile license, then all
> have
> to pay a mobile license without any exceptions. If all mobile service
> providers are to pay VAT and exercise duty, then this has to be across the
> board.
>
> rgds,
> Okech
>
>
>
> On Thursday July 19 2007 21:38:48 Mike Theuri wrote:
> > "Competition is healthy. If other people complain, they should know that
> > Kenyans
> > now have a choice," Telkom Kenya Chief Market Officer Bernard Rubia told
> > Reuters
> > in an interview.
> >
> > Rubia says it was "debatable" whether partnering with an outside
> investor
> > was
> > necessary for Telkom to turn a profit. Job cuts that will downsize
> Telkom
> > to
> >
> > 4,000 employees from 18,000 by September are already realising savings
> of
> > 250
> > million shillings ($3.7 million) a month against 1.2 billion in
> billings.
> > "We should be given a five-year window to prove ourselves," he said,
> adding
> > shares should be sold to the public in the meantime.
> >
> > ================
> >
> > http://africa.reuters.com/wire/news/usnL19935122.html
> >
> > Kenya's state-owned telecoms operator goes mobile
> > Thu 19 Jul 2007, 13:40 GMT
> >
> > By C. Bryson Hull
> >
> > NAIROBI, July 19 (Reuters) - State-owned Telkom Kenya is making an
> > aggressive
> > foray into the east African country's wireless mobile and data markets,
> > aiming
> > for rebirth as a sleek operator before privatisation due to start later
> > this
> >
> > year.
> >
> > The loss-making state company, which has a monopoly on landlines,
> earlier
> > this
> > month rolled out the lowest mobile phone tariff in Kenya and stepped up
> > advertising to bring in customers to its brand-new wireless network.
> >
> > That has sparked complaints from the other two mobile operators in
> Kenya,
> > market
> > leader Safaricom and Celtel Kenya, who say the state company has an
> unfair
> > regulatory advantage.
> >
> > "Competition is healthy. If other people complain, they should know that
> > Kenyans
> > now have a choice," Telkom Kenya Chief Market Officer Bernard Rubia told
> > Reuters
> > in an interview.
> >
> > "And they will choose based on reliability, consistency and
> affordability."
> >
> > Telkom may seem an unlikely choice -- customers have long complained
> that
> > inefficiency, corruption and monopoly control of landlines have kept
> > Telkom's
> > prices high and service poor, but it is now in the middle of a major
> > restructuring.
> >
> > And Kenyans are quick to go for the best deal. It is not uncommon for
> > someone to
> > have multiple phone lines to take advantage of the cheapest rate or to
> > avoid the
> > steep expense of calling from one network to the other.
> >
> > On a trial run since September, the company's mobile subsidiary Telkom
> > Wireless
> > so far has 150,000 subscribers and is adding an average of 1,000 per
> day,
> > Rubia
> > said.
> >
> > "Our target is by the end of June next year we will have hit our 1
> million
> > mark," he said adding the average customers spends 800 Kenya shillings
> > ($11.92)
> > a month.
> >
> > That is dwarfed by the 6.8 million Safaricom has out of an estimated 8-9
> > million
> > users in the nation of 36 million people.
> >
> >
> > BANKING ON CDMA
> >
> > Telkom has rolled out a CDMA network to about 70 percent of the country
> to
> > compete with Safaricom and Celtel, which operate a GSM network like most
> > mobile
> > companies in Africa.
> >
> > Rubia says the choice of CDMA was to lure Kenyan customers who get
> > irritated by
> > congestion on the GSM networks.
> >
> > "One of our towers is equivalent to four of theirs in terms of
> capacity,"
> > he
> >
> > said.
> >
> > A second benefit is to cash in on its data capabilities, which are
> faster
> > than
> > GSM. By September, Rubia says Telkom will offer EVDO, a mobile broadband
> > data
> > technology.
> >
> > But like other Internet data providers in Kenya, they will not be able
> to
> > use
> > the maximum capacity until the country gets a fibre optic connection to
> the
> > Internet backbone.
> >
> > Currently it gets it via expensive satellite links that limit bandwidth
> and
> > market growth. Rubia says he expects at least one of two projects to
> give
> > Kenya
> > a wired link to the outside world to be ready by "the back end of next
> > year."
> >
> > Telkom Wireless customers will be able to access EVDO via mobile
> handsets
> > and
> > also wireless desktop phones.
> >
> > The latter often serve as Internet links in rural areas where there is
> > little or
> > no infrastructure -- and where mobile operators say there are still huge
> > untapped profits in Africa.
> >
> > The government wants to sell a 51 percent stake in Telkom to a strategic
> > partner, with an eye on an IPO that would eventually sell 30 percent to
> the
> > public. Proposals are due to be opened by early November.
> >
> > Rubia says it was "debatable" whether partnering with an outside
> investor
> > was
> > necessary for Telkom to turn a profit. Job cuts that will downsize
> Telkom
> > to
> >
> > 4,000 employees from 18,000 by September are already realising savings
> of
> > 250
> > million shillings ($3.7 million) a month against 1.2 billion in
> billings.
> >
> > "We should be given a five-year window to prove ourselves," he said,
> adding
> > shares should be sold to the public in the meantime.
>
>
>
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