[kictanet] GoK-Telkom-France Telecom agreement - Was This a Fair Deal to the Tax-Payer?

[Shem Ochuodho]

Firstly, I am impressed the media is at last taking this matter up. In the past any queries on the sale of Telkom Kenya (TKL) to France Telecom was a 'no touch'. At a separate level this is an issue those who would like to see 'objective and independent' media need to interrogate: how do you deal with media ‘loyalty’ to the ‘big boys’ who pay for ads like Orange, Safaricom, Zain, etc?
 
Back to TKL sale: on this and other online spaces, I have raised concerns and reservations about this transaction. It is indeed very surprising that even after purchasing TKL for a song, Kenyan Tax Payers/GoK are/is now being asked to pay Orange a further US$300m+! The jewel that TKL should have been will have been sold for FREE, yes, literally FREE! Even a cursory look should convince anyone TKL was under-sold: at the same period, 70% of GhanaTel was sold to Vodacom for US$900 (a figure the then opposition – now Govt in Ghana – still contested)! On a simple pro-rata basis, one would have thought TKL would have fetched higher.
 
As Victor raises elsewhere, even the operation and maintenance of NOFBI should have been competitively out-sourced. Actually, I thought a while back I saw an advert re O&M Contract for NOFBI! Several contributors have raised the issue of ‘transparency and accountability’; lack of the same bedeviled even the earlier sale of TKL. Many Kenyans just woke up one day in the run-up to the 2007 elections to realize the ‘jewel’ was gone, for a song! With over 18,000 workers (including skilled) on the streets without a proper retrenchment plan! I guess hardly 3,000 remained at the new TKL! And Kenyans are being asked now to pump in more into this transaction: was it worthwhile in the first place? Were we fair to bidders who lost with the terms now being varied ‘after sale’?
 
More questions than answers! Perhaps Hon (Eng) Rege who Chairs what used to be Energy, Communications & Public Works (ECPW) Committee of Parliament and is on this space should get his committee to seek for the public more answers.
 
Rgrds,
Shem

--- On Tue, 22/6/10, Badru Ntege <ntegeb at one2net.co.ug> wrote:

From: Badru Ntege <ntegeb at one2net.co.ug>
Subject: Re: GoK-Telkom-France Telecom agreement
To: shemochuodho at yahoo.com
Cc: "'KICTAnet ICT Policy Discussions'" <kictanet at lists.kictanet.or.ke>
Date: Tuesday, 22 June, 2010, 17:43


PS 

The rest of the email made good sense however on the issue below I think
though right it could have been done better for transparency and accounting
procedures especially in an environment where we have private sector
investing alongside government. 


> 
> Any business entity requires to always injection of capital equivalent
> to
> their share participation.  Orange has been injecting working capital
> to
> TKL without corresponding response from GOK.  The cost for 3G is an
> equivalent capital injection from GoK.  Above all GoK owns part of TKL
> and
> like any other business will be required from time to time to pay up or
> receive what is due to it.
> 

[] 
So orange should have made the payment and then GOK would just turn that
around and pay it back to Orange as their capital input as shareholders.

End result is the same however Creates a transparent transaction and negates
any misunderstanding by stakeholders.
[] 

Regards 

Badru
> 
> 
Re: GoK-Telkom-France Telecom agreement
Tuesday, 22 June, 2010 17:26
From: 
"Eric M.K Osiakwan" <emko at internetresearch.com.gh>
Add sender to Contacts 
To: 
shemochuodho at yahoo.com
Cc: 
"KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
 
Dr. Ndemo,

While your explanations below is good, it would be helpful to make public the exact details of the agreement so that we can make imput not based on the media publications as stipulated below, otherwise it does not help the process when the facts are not exactly clear, except you concede that the news publications are correct?

Eric here



On 22 Jun 2010, at 12:34, bitange at jambo.co.ke wrote:

> Andrea Bohnstedt,
> The National Optic Fibre Broadband Infrastructure (NOFBI) is an open
> access platform.  It is like any other highway in Kenya where you can
> drive through with equal rights as other users.  It cannot and will never
> be owned by any single operator.  That will negate the principal of open
> access.  NOFBI was built leveraging on Telkom Kenya facilities
> countrywide.  It therefore made sense to give them the Management and
> Maitenance contract.  This is like giving your property to a real estate
> company to manage within your terms.
> 
> The Government Capacity in Teams is mainly used within government and for
> restoration purposes.  This excess capacity can be utilized by interested
> parties and need to be managed without necessarily ceeding ownership.  The
> Government will not create another competing entity in the telcoms sector
> but must prudently utilize public resources.
> 
> Any business entity requires to always injection of capital equivalent to
> their share participation.  Orange has been injecting working capital to
> TKL without corresponding response from GOK.  The cost for 3G is an
> equivalent capital injection from GoK.  Above all GoK owns part of TKL and
> like any other business will be required from time to time to pay up or
> receive what is due to it.
> 
> On past bills, it seems you may not be aware where we have come from.
> 
> On the decision to lower 3G licence, either way we were to face criticism.
> 
> 
> Regards
> 
> 
> Ndemo
> 
> 
Victor Gathara" <v-gathara at dfid.gov.uk>
Add sender to Contacts 
To: 
shemochuodho at yahoo.com
Cc: 
"KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
Andrea,
 
Reading this from Dar where I am struggling to get TTCL to give us a connection to their fibre network so that we can have a 'fibre all through' solution to our office. Been here for the implementation since Friday but still no hope of a breakthrough mainly due to TTCL's bureaucracy and attitude. Clearly competition would help here! I would definitely be concerned if 'France Telecom to be granted an exclusive operational and maintenance contract for the government-owned, multimillion-dollar nationwide optic fibre network.' Having an operational and maintenance contract for NOFB is a good thing but would hope it would be done through competitive bidding...
 
Victor
> 
> 
> > Dear all,
> >
> > I have been quite intrigued by the negotiations between GoK and
> France
> > Telecom over their Telkom acquisition that were covered nicely
> > consistently
> > by the East African in recent weeks.
> >
> > The latest instalment here:
> >
> http://www.theeastafrican.co.ke/news/How%20the%20French%20got%20their%2
> 0way%20in%20battle%20for%20Telkom%20Kenya/-/2558/942312/-/gktealz/-
> /index.html
> >
> > The article states that GoK and France Telecom have come to an
> agreements
> > under which
> >
> >    - GoK will pay the USD10m fee for the 3G license for Telkom - in
> that
> >    context, I'd be curious to know if CCk will refund USD15m to
> Safaricom
> > as,
> >    from what I understand, they had initially promised to do if the
> > license fee
> >    will be lowered from its initial USD25m?
> >    - GoK will clear overdue bills to Telkom, contributions to the
> pension
> >    fund, overdue payment to KBC: no issue with these since it appears
> fair
> >    enough that GoK clears liabilities that precede the privatisation
> > (never
> >    mind the question why GoK/parastatals have been let to accumulate
> such
> >    obligations in the first place).
> >    - Telkom to manage and control GoK's 20% stake in TEAMS.
> >
> >
> >    - France Telecom to be granted an exclusive operational and
> maintenance
> >    contract for the government-owned, multimillion-dollar nationwide
> optic
> >    fibre network. Since we had all these elaborate discussions
> recently in
> > the
> >    context of the new tariff regulations regarding competition and
> level
> >    playing field, I wonder how this helps to create a level playing
> field?
> >
> > I haven't read much from GoK/CCK/Min of Information on this so far,
> so
> > first
> > of all, I'd be curious to know how much of the East African coverage
> is
> > accurate, and if not, what the facts are - if the PS Information is
> > reading
> > along?
> >
> > And then I'd be interested to hear opinions on how this will affect
> the
> > competitive landscape. Anyone thoughts?
> >
> > Have a good day and keep warm :)
> >
> > Andrea
> >
> > ----------------------------------------------
>


      
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