[kictanet] GoK-Telkom-France Telecom agreement

Mon Jun 28 14:51:41 EAT 2010

Dr. Ndemo,

Hope your morning is well.

I would take it that the media report is subtantive in which case, what we have is not different from what happened in Ghana re: the Vodafone transaction in which the Ghana government threw in the national fiber backbone (under NCBC - an independent national backbone provider) to sweeten the deal except in this case, it is after the facts. That decision soo compromised the idea of an open access national fiber backbone that MTN, tiGO and now Glo are building their own competiting national fiber backbones. While this means that there is competition in that layer of the network, it begs the question of market uptake against multiple investments of the same dollar which is transfered to the enduser as high cost?

Giving the management and maintenance contract to an active competitor in the market just gives room for abuse of incumbency and compromises the ability of the regulator to be active in a market as ours, even in more matured markets Rory Macmillan in the attached piece underlines the multiple challenges the regulator faces so am afraid to conclude that in your bid to salvage the Telkom Kenya deal, you have skewed the market in their direction which raises the question of the real intent at play. I hope you forgive my blantness.....

Good day.

Eric here

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On 22 Jun 2010, at 13:26, Eric M.K Osiakwan wrote:

> 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
>> 
>> 
>> 
>> 
>> 
>>> 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%20way%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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>> 
>> 
>> 
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> 
> Eric M.K Osiakwan
> Director 
> Internet Research
> www.internetresearch.com.gh
> emko at internetresearch.com.gh
> 42 Ring Road Central, Accra-North
> Tel: +233.21.258800 ext 7031
> Fax: +233.21.258811
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> 
> 
> 
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Eric M.K Osiakwan
Director 
Internet Research
www.internetresearch.com.gh
emko at internetresearch.com.gh
42 Ring Road Central, Accra-North
Tel: +233.21.258800 ext 7031
Fax: +233.21.258811
Cell: +233.24.4386792