[kictanet] RELIANCE MISSES OUT ON SNO LICENCE IN KENYA

[Muriuki Mureithi]

It is time we reviewed the bidding system this country has adopted   to
remove conflict of policy interest and move this country forward. We must
address ourselves to the purpose of the licence - is it to  make money for
the government to fill treasury gaps or to expand the telecommunications
infrastructure. By demanding to have the cake and eat it, we are nowhere   5
years after starting the process of SNO and Third Cellular Operator. It is a
lesson well documented in countries that Kenya copied ref Senegal and Malawi
among others. At the heart of the conflict is a government stating that ICT
is the driver of growth   yet put barriers   which cripple the operators
even before they start. 

The requirements of local partnership while sweet for political reasons is
difficult to realise because the international partners have inadequate time
to assess the right partner and hence the problems for SNO and third
cellular 

We need immediate action 
- first, scrap the requirement of 30% local owner by the time of application
of licence  but require that within 3 years the winner has brought on board
local shareholders through the stock exchange and raise ownership to at
least 49% by year 5 of operation . This has worked well for Tz
- Second, the licence is not a cash cow - we need infrastructure badly now
therefore that licence money should be invested to enable the  new entrant
to compete with the incumbents  and roll out rapidly .  Licence should not
cost more that USD1. What the entrants should compete with is the cash they
will invest in Kenya and the timeline. 
-finally, CCK should address the anomaly of conflicting policies it issues.
In 2004, CCK issued a policy which translates to adoption of  horizontal
licensing regime to move away from vertical licensing regime. The SNO
licence is in direct contradiction of the 2004 policy. Was the policy
rescinded? The danger of the unified licence is that it denies Kenyan ICT
entrepreneurs a natural growth path and condemns Kenya to permanently have
few mega operators and many small operators   without a path to migrate from
small to big. Should the envisaged fast growing economy to vision 2030 be
hinged on few mega operators whose power can sometimes rival the regulator?
We need a paradigm shift towards horizontal licensing 

Cheers 
Muriuki Mureithi
 
---------------------------------------
Summit Strategies Ltd  - 
ICT Consultancy  &  Research in  Eastern & Central African markets  
Contacts : Tel  +254 (20) 3875824 , Cell + 254 (722) 520090, 
email: mureithi at summitstrategies.co.ke 
 alternate email : muriuki.mureithi at gmail.com
 
 
 

-----Original Message-----
From: kictanet-bounces+mureithi=summitstrategies.co.ke at kictanet.or.ke
[mailto:kictanet-bounces+mureithi=summitstrategies.co.ke at kictanet.or.ke] On
Behalf Of alice
Sent: 19 March 2007 09:01
To: mureithi at summitstrategies.co.ke
Subject: [kictanet] RELIANCE MISSES OUT ON SNO LICENCE IN KENYA

 From BALANCING ACT:

RELIANCE MISSES OUT ON SNO LICENCE IN KENYA

The Communications Commission of Kenya has cancelled a tender for the second
national operator (SNO) licence that it had awarded Reliance Communications,
after the consortium failed to pay for the fees.

This is the second cancellation, after CCK annulled the licence it had given
a consortium led by Dubai-based Vtel Holdings in January, for failing to pay
the US$169 million (Sh12 billion) licence fee it had bid.

Reliance, which was the second highest bidder at US$111 million (Sh7.8
billion), was allowed to apply for the licence, but on condition that it pay
Sh12 billion to match Vtel's bid. Reliance confirmed that it would take up
the offer and requested for more time to prepare for the licence.

CCK said last week Reliance had a deadline of March 15. "By the expiry of
the said deadline at 4.00 p.m. yesterday (Thursday) Reliance Communications
had not made a formal application for the licence as required," CCK said.
The Commission's director-general John Waweru said they had resolved to
immediately restart the tendering process for the licence.
(SOURCE: The Nation)


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