Lucy, besides stating the issues/mandate rather than just the composition<br>to the new Board, you've so clearly given the way forward, made it extremely <br>difficult for the government to continue ignoring *absent* local participation,<br>that I feel that you may have just put out the "Public Court" ToRs for the Board<br>performance contracts? <br> <br>Otherwise, what is the point of *state-of-the-art" ICTs if the price is perennial <br>super repatriations? Uganda has a condition that at least 50% of all profits <br>made in Uganda are spent in Uganda (not put in plane destined abroad).<br><br>Must reclaim a lost middle class, and we are not asking...were telling!<br><br>(Eric, Gova's Next Year is 3 months away:-)<br><b><i><br>Lucy Kimani <lkimani@comnews.co.ke></i></b> wrote:<blockquote class="replbq" style="border-left: 2px solid rgb(16, 16, 255); margin-left: 5px; padding-left: 5px;"> Eric and Muriuki,<br><br>I too think the issues you raise are extremely
important. The CCK<br>tendering process definately needs an overhaul! It has not worked, and<br>issuing another tender under the same rules will bear the same results,<br>why keep doing the same thing over and over and expect different results<br>each time? Something is broken and it needs to be fixed...<br><br>On the 30% and I am borrowing heavily from an article I wrote for ComNews<br>Africa -- It is no secret that foreign investors will repatriate their<br>profits 100% of the time, and having 30 percent local stake ensures that<br>the country at least retains some earnings in the country. Actually there<br>is a bigger issue with the 30% that calls on or challenges the government<br>to establish exactly what is the root cause for the local investors not<br>coming up with their share of funds? The answer lies in the risk averse<br>banking industry that seems unwilling and unable to take the necessary<br>risk in order to fund telecommunications projects, thereby
leaving a gap<br>that the government could very easily fill were they to adopt the models<br>followed by the west, and indeed even the eastern governments, whereby the<br>government stands in as guarantors to enable enterprenieurs access funding<br>from banking institutions. One way of doing this, would be to set up a<br>National Small Business Office (NSBO), along the line of the Small<br>Business Agency in the US, and the Small Business Service in the UK. In<br>the United States, the Small Business Administration (SBA) runs several<br>loan programs that may help a small business secure loans. In these<br>programs, the SBA guarantees a portion of the loan to the issuing bank and<br>thus relieves the bank of some of the risk of extending the loan to the<br>small business,<br><br>The National Small Business Office would be an independent body and would<br>have overall responsibility nationwide for all policies and programs<br>relating to small businesses, including micro
businesses, and start-ups,<br>would have its own budget, and would be closely monitored by and<br>answerable directly to the Parliament. The NSBO can be replicated at the<br>district level. The District Small Business Office (DSBOs) would have<br>responsibility for running national policies and programs set up by the<br>NSBO at the national level and would also be directly answerable to<br>parliament. A particular task appropriate for the NSBO would be in the<br>setting up of a Kenya EXIM ***Bank that would be responsible for promotion<br>of exporting activities amongst small businesses to make them more outward<br>looking and more able to participate in the global marketplace.<br><br>The Americans, Japan, Germans, Canadians and the Europeans, and even the<br>Russians all have similar programs. There are approximately 23 million<br>small businesses in the US. These altogether employ more than 50 % of the<br>private workforce, and generate more than half of the nation’s
gross<br>domestic product (GDP). In the European Union, small businesses are seen<br>as largely essential for European employment. Each year, one million new<br>small businesses set up in the European Union. Small businesses account<br>for 99.8% of all companies and 65% of business turnover in the European<br>Union. In the UK, it is estimated that in 1980 there were about 1.9<br>million firms but by 1990 this total had risen to 2.8 million. Small<br>businesses still comprise the great majority of all businesses in the UK<br>with well over 90 per cent of all businesses having fewer than twenty<br>employees. At the start of 1997, there were 3.7 million businesses, with<br>99% of these having less than 50 employees. The Europeans having recently<br>increased the loan guarantee amount meaning they recognize the importance<br>of the program which includes such success stories as Anita Roddick’s body<br>shop. Ms. Roddick opened a small beauty product store called the
Body<br>Shop in England in 1976, she had just one goal: survival. The mother of<br>two was simply looking for a way to pay the bills with a product line of<br>natural-based shampoos and lotions. Ms. Roddick was able to purchase her<br>first store with a small business loan guarantee, almost 30 years later,<br>Ms. Roddick has ushered in a revolution in the cosmetics industry with a<br>chain of 2,000 stores around the world. This year, the L'Oreal cosmetics<br>giant purchased the Body Shop for a little more than $1 billion.<br><br>The success of the programs above lies in the importance attached to small<br>businesses by the governments of each country and the role they play in<br>national economic development. In the UK, these businesses not only form<br>the bedrock of the British economy, but they are widely accepted as the<br>main hub of economic activity in the country. They are seen not just as<br>job creators, but as creators of wealth. But to top it all, the
UK<br>government firmly believes that small and medium sized businesses are<br>crucial to a successful enterprise economy and is fully committed to<br>stimulating the creation, competitiveness and growth of new and small<br>businesses. The UK government supports these small businesses with key<br>policies in place to encourage and maintain a supportive economic<br>environment.<br><br>Thinking outside the box means that the Kenyan government recognizes where<br>the problem resides, and then address this by recognizing that the 30<br>percent local stake is crucial to Kenya’s continued growth and<br>development, and it sees the hidden potential that lies within the 30<br>percent local stake, and recognizes that abolishing this local stake<br>should not even be an option. Small businesses are the backbone of the<br>any economy, and the government needs to reflect its acceptance and<br>recognition of this, and the Government must have small business policy at<br>the top of
its agenda. The government has to ensure that it puts concrete<br>steps in place to ensure that the local investors grow and prosper by<br>taking an approach that includes fostering an enterprise culture that<br>encourages innovators and risk takers; providing and maintaining a<br>supportive economic environment; identifying and removing barriers to<br>growth and providing high quality business support for the local investors<br>at all stages of their development.<br><br>LK<br><br>> Muriuki,<br>><br>> Issues well raised and am sure the government would like to listen.<br>><br>> I would suggest that a KICTANET meeting at which the larger framework<br>> of vertical as opposed to horizontal layering or unified licensing as<br>> opposed to Open Access of the communication system is discussed in<br>> detailed with the pros and cons. This meeting should end with some<br>> majority consensus and should have all the stakeholders so that as<br>> sector
we are clear at least on the framework of our engagement going<br>> forward.<br>><br>> I would also submit that a seperate meeting at which the local<br>> ownership of foreign stake and the mechanism for SME uptake as well<br>> as growth path is clearly outlined so that whiles you need some big<br>> fishes now you can also create your own big fishes in the future and<br>> more so as the sector progress with time.<br>><br>> Eric here<br>><br>><br>><br>> On 19 Mar 2007, at 11:58, Muriuki Mureithi wrote:<br>><br>>> It is time we reviewed the bidding system this country has<br>>> adopted to<br>>> remove conflict of policy interest and move this country forward.<br>>> We must<br>>> address ourselves to the purpose of the licence - is it to make<br>>> money for<br>>> the government to fill treasury gaps or to expand the<br>>> telecommunications<br>>> infrastructure. By demanding to
have the cake and eat it, we are<br>>> nowhere 5<br>>> years after starting the process of SNO and Third Cellular<br>>> Operator. It is a<br>>> lesson well documented in countries that Kenya copied ref Senegal<br>>> and Malawi<br>>> among others. At the heart of the conflict is a government stating<br>>> that ICT<br>>> is the driver of growth yet put barriers which cripple the<br>>> operators<br>>> even before they start.<br>>><br>>> The requirements of local partnership while sweet for political<br>>> reasons is<br>>> difficult to realise because the international partners have<br>>> inadequate time<br>>> to assess the right partner and hence the problems for SNO and third<br>>> cellular<br>>><br>>> We need immediate action<br>>> - first, scrap the requirement of 30% local owner by the time of<br>>> application<br>>> of licence but
require that within 3 years the winner has brought<br>>> on board<br>>> local shareholders through the stock exchange and raise ownership<br>>> to at<br>>> least 49% by year 5 of operation . This has worked well for Tz<br>>> - Second, the licence is not a cash cow - we need infrastructure<br>>> badly now<br>>> therefore that licence money should be invested to enable the new<br>>> entrant<br>>> to compete with the incumbents and roll out rapidly . Licence<br>>> should not<br>>> cost more that USD1. What the entrants should compete with is the<br>>> cash they<br>>> will invest in Kenya and the timeline.<br>>> -finally, CCK should address the anomaly of conflicting policies it<br>>> issues.<br>>> In 2004, CCK issued a policy which translates to adoption of<br>>> horizontal<br>>> licensing regime to move away from vertical licensing regime. The SNO<br>>>
licence is in direct contradiction of the 2004 policy. Was the policy<br>>> rescinded? The danger of the unified licence is that it denies<br>>> Kenyan ICT<br>>> entrepreneurs a natural growth path and condemns Kenya to<br>>> permanently have<br>>> few mega operators and many small operators without a path to<br>>> migrate from<br>>> small to big. Should the envisaged fast growing economy to vision<br>>> 2030 be<br>>> hinged on few mega operators whose power can sometimes rival the<br>>> regulator?<br>>> We need a paradigm shift towards horizontal licensing<br>>><br>>> Cheers<br>>> Muriuki Mureithi<br>>><br>>> ---------------------------------------<br>>> Summit Strategies Ltd -<br>>> ICT Consultancy & Research in Eastern & Central African markets<br>>> Contacts : Tel +254 (20) 3875824 , Cell + 254 (722) 520090,<br>>> email:
mureithi@summitstrategies.co.ke<br>>> alternate email : muriuki.mureithi@gmail.com<br>>><br>>><br>>><br>>><br>>> -----Original Message-----<br>>> From: kictanet-bounces+mureithi=summitstrategies.co.ke@kictanet.or.ke<br>>> [mailto:kictanet-bounces<br>>> +mureithi=summitstrategies.co.ke@kictanet.or.ke] On<br>>> Behalf Of alice<br>>> Sent: 19 March 2007 09:01<br>>> To: mureithi@summitstrategies.co.ke<br>>> Subject: [kictanet] RELIANCE MISSES OUT ON SNO LICENCE IN KENYA<br>>><br>>> From BALANCING ACT:<br>>><br>>> RELIANCE MISSES OUT ON SNO LICENCE IN KENYA<br>>><br>>> The Communications Commission of Kenya has cancelled a tender for<br>>> the second<br>>> national operator (SNO) licence that it had awarded Reliance<br>>> Communications,<br>>> after the consortium failed to pay for the fees.<br>>><br>>> This is the second
cancellation, after CCK annulled the licence it<br>>> had given<br>>> a consortium led by Dubai-based Vtel Holdings in January, for<br>>> failing to pay<br>>> the US$169 million (Sh12 billion) licence fee it had bid.<br>>><br>>> Reliance, which was the second highest bidder at US$111 million (Sh7.8<br>>> billion), was allowed to apply for the licence, but on condition<br>>> that it pay<br>>> Sh12 billion to match Vtel's bid. Reliance confirmed that it would<br>>> take up<br>>> the offer and requested for more time to prepare for the licence.<br>>><br>>> CCK said last week Reliance had a deadline of March 15. "By the<br>>> expiry of<br>>> the said deadline at 4.00 p.m. yesterday (Thursday) Reliance<br>>> Communications<br>>> had not made a formal application for the licence as required," CCK<br>>> said.<br>>> The Commission's director-general John Waweru said
they had<br>>> resolved to<br>>> immediately restart the tendering process for the licence.<br>>> (SOURCE: The Nation)<br>>><br>>><br>>> _______________________________________________<br>>> kictanet mailing list<br>>> kictanet@kictanet.or.ke<br>>> http://kictanet.or.ke/mailman/listinfo/kictanet<br>>><br>>> Please unsubscribe or change your options at<br>>> http://kictanet.or.ke/mailman/options/kictanet/mureithi%<br>>> 40summitstrategies.c<br>>> o.ke<br>>><br>>> --<br>>> No virus found in this incoming message.<br>>> Checked by AVG Free Edition.<br>>> Version: 7.5.446 / Virus Database: 268.18.11/721 - Release Date:<br>>> 13/03/2007<br>>> 16:51<br>>><br>>><br>>><br>>> _______________________________________________<br>>> kictanet mailing list<br>>> kictanet@kictanet.or.ke<br>>>
http://kictanet.or.ke/mailman/listinfo/kictanet<br>>><br>>> Please unsubscribe or change your options at http://kictanet.or.ke/<br>>> mailman/options/kictanet/eric%40afrispa.org<br>>><br>><br>> Eric M.K Osiakwan<br>> Executive Secretary<br>> AfrISPA (www.afrispa.org)<br>> Tel: + 233.21.258800 ext 2031<br>> Fax: + 233.21.258811<br>> Cell: + 233.244.386792<br>> Handle: eosiakwan<br>> Snail Mail: Pmb 208, Accra-North<br>> Office: BusyInternet - 42 Ring Road Central, Accra-North<br>> Blog: http://blogs.law.harvard.edu/eric/<br>> Slang: "Tomorrow Now"<br>><br>><br>><br>><br>> _______________________________________________<br>> kictanet mailing list<br>> kictanet@kictanet.or.ke<br>> http://kictanet.or.ke/mailman/listinfo/kictanet<br>><br>> Please unsubscribe or change your options at<br>>
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