[kictanet] RELIANCE MISSES OUT ON SNO LICENCE IN KENYA

Mon Mar 19 12:45:24 EAT 2007

Muriuki,

Issues well raised and am sure the government would like to listen.

I would suggest that a KICTANET meeting at which the larger framework  
of vertical as opposed to horizontal layering or unified licensing as  
opposed to Open Access of the communication system is discussed in  
detailed with the pros and cons. This meeting should end with some  
majority consensus and should have all the stakeholders so that as  
sector we are clear at least on the framework of our engagement going  
forward.

I would also submit that a seperate meeting at which the local  
ownership of foreign stake and the mechanism for SME uptake as well  
as growth path is clearly outlined so that whiles you need some big  
fishes now you can also create your own big fishes in the future and  
more so as the sector progress with time.

Eric here

On 19 Mar 2007, at 11:58, Muriuki Mureithi wrote:

> 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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Eric M.K Osiakwan
Executive Secretary
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