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

Sat Jul 21 11:43:54 EAT 2007

Dear Mr. Theuri,
The Government has not been deprived any revenue here.  If you remember
sometime last year the Regulator encouraged operators to pilot Broadband
in the Mobile Telephony after which each are to pay for the 3G
frequencies.  The piloting period is not over yet and we all are looking
forward to the new fee.

Thanks for your alertness.

Regards

Bitange Ndemo.

> 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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