New 4G Rules Favour Safaricom Over Other Networks

The government has changed the telecommunication licensing rules in a way that promises to lower the cost of acquiring high-speed delivery platforms and give one operator control of the market.

The new rules that among other things requires those bidding for the 4G spectrum licence is hinged on the Public Private Partnerships (PPP) model and are aimed at avoiding the battle over the pricing that dogged the issuance of the 3G licences.

Tender rules that were published on Tuesday indicate that unlike in the past when the licence was awarded to each operator, the 4G will be controlled by a consortium of players who must have at least 20 per cent local ownership.

The requirement locks out Airtel and Essar's Yu, leaving Safaricom and Telkom Kenya in the race for the tender.

The two are the only holders of the Network Facilities Provider Tier 1 category (the technical reference to mobile phone operators' licence) and with a 20 per cent local shareholding.

The government, through Treasury, has 49 per cent stake in Telkom Kenya while Safaricom is owned 40 per cent by the UK's Vodafone, 35 per cent by the Government of Kenya and 25 per cent by the public through the Nairobi Stock Exchange.

Airtel Kenya has a five per cent local ownership, after businessman Naushad Merali - the sole local partner -- sold 15 per cent of his stake in the firm last year.

Essar's Yu is 100 per cent owned by India's Essar Communications, which bought the 20 per cent stake that local firms Capital Africa, CrossLink and Startnet held last year for an undisclosed sum.

Rene Meza, the Airtel managing director, questioned the transparency of the tendering process and promised that his firm will be seeking clarification, especially on the 20 per cent rule as Airtel intends to fully participate in the tendering process.

"We will seek clarification on the requirement of 20 per cent ownership. We believe it is sufficient that an operator is licensed," said Mr Meza. "Because there is no structure for the tender proposal, evaluation of the bids by the Ministry of Information may be subjective to the extent that undermines transparency and fairness."

4G refers to the fourth generation of wireless telecommunication technology with a larger capacity to deliver data and facilitate high end of market services such as video conferencing and gaming.

Kenya's telecom operators see ownership of the technology as critical to future revenue growth with the continued decline in earnings from the voice business.

Prospective bidders are also questioning the requirement that the government becomes part of the consortia that will be competing for the 4G licence while at the same time participate in evaluation of the tenders. [Read: State to withhold licence for 4G frequency rollout]

On Thursday, the government said it will not bend the 20 per cent local ownership rule, arguing that Yu and Airtel chose to sidestep the local shareholding requirement.

"The two don't meet the 20 per cent rule and do not have national infrastructure that can be upgraded to 4G," said Bitange Ndemo, the Information permanent secretary.

Dr Ndemo said the 20 per cent rule is a policy requirement that Airtel and Yu should make an effort to comply with.

People familiar with the policy position on the matter said the ultimate goal of the tendering is to open a window for the government to ride on operators with national coverage to reduce the cost and time of deploying the 4G network in readiness for use in e-voting in 2012.

"An individual firm will have to spend not less than $4 billion to roll out the infrastructure but the model we have proposed will cost an average of $100 million and take less time," said our source.

Telecoms sector ownership rules require foreign companies to have a 20 per cent local shareholding.

It, however, gives foreign investors three year grace period to look for suitable partners.

Econet Wirelesss International, which held the third mobile license was the first beneficiary of this rule that helped it survive a protracted court battle with its local partners, the Kenya National Federation of Farmers.

Econet ultimately sold its shares to Essar Communication, a subsidiary of India's Essar Global four years ago.

He acquired and immediately sold the Vivendi stake in 2004 at $250 million remaining with his 40 per cent.

Kuwait's MTC then bought Celtel out of 16 African countries in 2005 and three years later, Mr Merali sold half of his stake to Zain putting 80 per cent of the firm in foreign hands.

Last year, Mr Merali sought exemption and was allowed to sell an additional 15 per cent of his stake - a move that has now come back to Bharti Airtel, the current owners.

The tender specifications have also locked out infrastructure providers such as Kenya Data Networks, AccessKenya, Jamii and Wananchi Group who do not fall within the licence category specified on the tender notice.

Joshua Chepkwony, the chairman of the Telecommunication Network Operators said that while having an open access 4G network was positive, the manner in which the tender document has been structured shows that the government has a pre-determined candidate.

"There is need to call for a stakeholders meeting to explain the desired composition of the consortium because as it is the tender document locks out operators who are not in the tier 1 category but fall within the telecoms ecosystem," he said.

The LTE -- commonly known as 4G --offers subscribers access to mobile internet at much faster speeds, making it a cutting edge tool for companies offering their services on the medium.

The government says it will offer 4G license to a consortium of players that will implement and manage it to avert disputes encountered with the issuance of the 3G licences to the late entrants.

Safaricom paid $25 million for the 3G license fee, only for the government to lower the fee to $10 million for Airtel and Telkom Kenya or 60 per cent less than Safaricom.

Under the new model, the consortium members will be composed of government (the owner of the national spectrum), equipment suppliers such as Huawei, Nokia Siemens Networks, Alcatel Lucent and Ericsson who must team up with telecommunication firms such as Safaricom, Telkom Kenya for expertise and equipment needed for the rollout.

The move comes as mobile operators shift their focus to data, with competition in the voice segments getting stiff and revenue starting to decline with deep tariff cuts that have since August last year lowered the cost of voice calls by 50 per cent.

Orange Launches 3G Network In Nairobi, Kisumu and Mombasa

Telkom Kenya (Orange) has announced that its long-awaited 3G network has launched commercially in Nairobi, Mombasa and Kisumu, with plans for additional regional deployments as demand for data-related services increases.


The KES4 billion (USD42.6 million) network deployment will offer subscribers theoretical download speeds of 21Mbps, and CEO Mickael Ghossein has described it as Kenya’s ‘best-in-class network’. 


Meanwhile, residential users will also be able to benefit from 3G connectivity, as Telkom has unveiled a new version of its ‘Internet Everywhere’ modem which supports the higher speeds; the new modem will retail for KES6,999. A shared Wi-Fi router for business users has been introduced simultaneously, allowing between six and ten users to connect to Telkom’s 3G network at any one time.

Telkom Kenya Launches Domestic Broadband Services

Telkom Kenya has confirmed that it has launched fibre-to-the-home (FTTH) broadband services in Muthaiga and Parklands, two of Nairobi’s most affluent suburbs. 

Telkom claimed that transmission speeds of up to 8Mbps are now available to subscribers. The service will reportedly be extended to other areas in due course, with triple-play services mooted by end-2011, pending negotiations with TV content providers. 

New double-play tariffs start at KES2,999 per month (USD34.7), rising incrementally to KES6,500. The premium package includes 2,000 free fixed line minutes, and an additional 3,500 mobile minutes.

Telkom Kenya CEO Mickael Ghossein commented: ‘By integrating our copper and fibre infrastructure, our new bouquet of ‘Orange Double-Play’ offers that we are unveiling today, are undoubtedly set to exceed the voice and data communication expectations of our customers. With speeds of up to 8Mbps, we now have a network easily scalable to transmit video signals, just like in developed countries. We are already in talks with partners that will see Orange introduce triple-play services in the near future. Today, we are launching Orange Double-Play to serve residents and businesses in Muthaiga and its environs; however we will soon roll this out further afield into other areas. We have now achieved our dream of delivering true broadband to Kenyan homes’.

If Orange does launch triple-play as planned, it will go head-to-head with the Wananchi Group which launched its own long-awaited triple-play service in December 2010, under the Zuku brand. The fibre package went live in the districts of Kileleshwa, Kilimani, Lavington and Hurligham. Fibre rollout to the remainder of Nairobi and Mombasa is scheduled to be completed during the second half of 2011, whilst Tanzania and Uganda have been mooted for subsequent connectivity. Wananchi intends to pass one million homes in East Africa by 2015.

Bharti and Vodafone Struggle to Make Money In Africa

For Vodafone Group Plc, Bharti Airtel Ltd. and other phone companies with about $90 billion invested in Africa, making more money from each user in the world’s fastest-growing market is becoming the biggest challenge.

The number of operators is prompting a race to the bottom on call rates. In Tanzania, which has seven phone companies, prices have fallen 90 percent over the past 18 months. Companies also face among the world’s highest “churn” rates, with users frequently changing operators, and patchy infrastructure, all of which make returns on investment difficult.

“It is hard,” said Pieter Uys, chief executive officer of Vodacom Group Ltd., which is controlled by Vodafone and is the largest provider of mobile-phone services in South Africa and Tanzania. “You have to do business in a very different way, you have to build data networks, find other ways to grow revenue.”

Phone operators gathered at Africa’s telecommunications conference that began yesterday in Cape Town want to sell services to the 50 percent of the market that doesn’t have mobile phones. They also want to service current customers more cheaply, without losing user loyalty, while stemming declines in average revenue per user, or ARPU, by offering newer services such as mobile Internet, banking and other money transactions.

“We are now dealing with an ecosystem that’s changing very, very fast,” Andile Ngacaba, chairman of Dimension Data and Convergence Partners, said at the conference. “On the one side, we see this subscriber growth and growth in data and data applications. On the other side, we see this decrease in ARPUs. This requires new models of investment such as infrastructure sharing.”

African Growth

Operators have been lured to the continent by its promise. Africa has a mobile-phone population of about 445 million handsets, according to a McKinsey & Co. report. It took 20 years for the size of the mobile-phone population to reach 200 million, and less than three years to get to the next 200 million, according to the report.

Africa has “become the fastest-growing region in the global cellular market, going from fewer than 2 million mobile phones in 1998 to more than 400 million today,” it said.

The mobile value-added services market in Africa was worth $4.5 billion in 2009, and over the next five years is forecast to grow at a compound annual growth rate of 20 percent, generating $11.5 billion by 2014, Informa Telecoms & Media, a London-based consultant, said in its Rural Connectivity Report in Africa published this month.

Capture Opportunity

About 80 percent of the sales were from messaging, while mobile Internet contributed 14 percent and mobile entertainment such as music and television 3.5 percent, the report showed.

Internet and broadband penetration is still in single digits, Uys said.

“So the possibilities are still there but it’s what you pay for it to get it, the investment in infrastructure,” he said. “If the tariffs are driven too low for whatever reason then it might also not make sense.”

In order for mobile operators to “capture this opportunity,” the market needs consolidation, McKinsey said. “The industry structure should be rationalized, for example, because many markets, even smaller ones, have four or more players.”

Competition on the continent is fiercer now than it has ever been. In the Democratic Republic of Congo and Tanzania, mobile-phone tariffs plunged between 50 percent and 60 percent in the six months through September.

Tumbling Prices

Prices in Kenya have been slashed to such an extent that Safaricom Ltd. Chief Executive Officer Bob Collymore said India’s Bharti, which bought most of Zain’s African operations last year for $9 billion, is losing money on as much as 50 percent of its voice traffic.

Safaricom has an 86 percent share of the market and is 40 percent held by Newbury, England-based Vodafone. Bharti’s head of African operations, Manoj Kohli, declined to comment on Safaricom’s remarks. “We can’t comment on our competitors’ claims,” Kohli said.

On Aug. 18, Bharti halved tariffs in Kenya to 3 shillings, Les Baillie, a spokesman for Safaricom said. Safaricom “knew that voice was always going to become a commodity,” Baillie said. “It was not expected that it would happen so rapidly though.”

Companies are scrambling to adapt their operations to the new climate.

“We have to review our business model and make it leaner and compete on price and have more quality in our network and to have more data,” said Mickael Ghossein, chief executive officer of Orange Telkom Kenya, which is 51 percent held by France Telecom SA. “We have to enhance our quality of networks.”

Sharing Towers

In South Africa, Vodacom, which is 65 percent owned by Vodafone, is investing in data networks. Data now accounts for more than 50 percent of its traffic and is growing at more than 50 percent a year, Uys said.

The company is also pushing smart devices that are able to browse the Internet to low-end segments with touchscreen phones that retail at 499 rand ($73). Once users have an improved mobile-browsing experience, data consumption increases, Uys said

Operators are also sharing infrastructure, especially to reach sparsely populated rural areas where returns on capital invested in infrastructure are low.

Infrastructure sharing and outsourcing of towers has been punted for years. Now, faced with greater competitive pressure, companies are beginning to act.

‘Good Industry’

Last month, Vodafone signed an agreement with Eaton Towers to manage its 750 towers in Ghana. On Nov. 5, American Tower Corp. agreed to buy 3,200 towers from Cell C Ltd., South Africa’s third-largest mobile phone services provider, in a deal worth $430 million.

“We are going to see more and more of those type of deals happening,” said David Lerche, a telecoms analyst at Johannesburg-based Avior Research. “There are lots of little tower companies running around trying to position themselves as tower outsourcers. It’s quite an interesting development.”

For all its challenges, the market is still attractive, Marc Rennard, vice president of Orange Mobile for Africa, Middle East and Asia, said in an interview.

While investor interest has waned a little, “we are profitable, the big players, the five, six main players are profitable,” he said. “It’s still a good industry.”

-Bloomberg

MTN Rebrands UUNet As It Takes On Kenya Market

South African telecoms giant MTN has formally announced its presence in the Kenyan broadband market, two years after acquiring a 60% stake in ailing corporate operator UUNet.

The re-branding of UUNet to MTN Business Kenya looks set to renew rivalry in the corporate data market, a marketplace in which UUNet’s fortunes have declined drastically in recent years.

Internet service providers AccessKenya and Kenya Data Networks have absorbed much of UUNet’s corporate business since 2008, whilst wireless operators Telkom Kenya and Safaricom have both embraced the relatively untapped residential broadband market in a bid to offset declining wireless revenues.

Tom Omariba, managing director of MTN Business Kenya commented: ‘An array of key structures and network transitions has been implemented to deliver standardised service and seamless integration for customers culminating in the official name-change, MTN Business Kenya’.

Dismissing speculation that MTN would try to insinuate itself into the residential market, Omariba continued: ‘You cannot be everything to all customers. We have to look at our strengths and choose which area we can serve. If you try and serve both markets, you will suffer ... that is the experience elsewhere’. MTN Business Kenya’s strategy is expected to involve a substantial cash injection, as well as providing the necessary technical expertise to strengthen its data business and grow its meagre corporate subscriber base, which MTN reported has dwindled to just 700 customers.

Access Increases Internet Speeds As it Reacts to Telkom Kenya Action

ISP AccessKenya has announced that it has doubled its residential broadband speeds for all subscribers to its Access@Home service; the speeds apply to subscribers of its Value, Premium and Elite packages.

Further, AccessKenya has confirmed that for the last quarter of 2010, any new customers signing up to Access@Home for a three month period will receive an additional month for free. As previously reported on CommsUpdate, AccessKenya recently announced that its turnover dropped by 17.5% to KES876 million (USD10.38 million) in 1H10, after its strategy of increasing bandwidth but freezing prices severely affected its bottom line.

This week rival telco Telkom Kenya doubled customers download limits, as part of a month-long promotion.

Jonathan Somen, managing director of AccessKenya commented: ‘As we grow and get more subscribers, we will continue to work on offering them more value and more speed. The market told us that they wanted a guaranteed service but with more bandwidth. Our new improved offerings keep the basic benefits of buying guaranteed speeds, while at the same time offering customers much more speed for the same money. Access@Home offers a service to our customers completely unlike any other residential internet offering in the market. Firstly, we offer customers a guaranteed high speed at a very affordable and fixed price. This is backed up with excellent levels of service and absolutely no data caps - effectively a corporate-style guaranteed service for users at home. Our new speeds come with glad tidings for our 4,000 residential clients. They shall enjoy these increased speeds at no extra cost from the comfort of their homes’.

Telkom Kenya Cuts Broadband Rates By 50%

Telkom Kenya has announced that it has reduced broadband costs by 50% as part of a one-month promotion. The telco claims that the new promotion has been informed by market research pointing to an increase in demand amongst students and young professionals. Telkom Kenya CEO Mickael Ghossein commented: ‘If you were spending KES150 (USD1.78) to buy an internet bundle of 50MB you will now be able to get 100MB for the same amount; for KES850, you will get 1000MB instead of the 500MB that you got previously’. Industry insiders view the move as an attempt to secure its leadership in the burgeoning broadband market. Based on retaliatory trends exhibited in the past, rival Safaricom, which recently entered the Kenyan broadband market, is expected to announce a similar move in the near future.

In other news, Telkom’s move has increased the pressure on Kenya’s long-standing internet provider AccessKenya, which has focused on corporate leased lines and high-end residential customers since its inception. AccessKenya announced this week that its turnover dropped by 17.5% to KES876 million at the end of 1H10; this year the firm opted to increase bandwidth capacity to its customers but freeze its prices. A company spokesperson said that growth of the firm's revenues would depend on ‘strong growth in both the corporate and residential customer base, driven by higher speeds and lower costs offered to customers’. However, Telkom’s move suggests that if AccessKenya does lower its charges, its income may well be diminished even further. According to AccessKernya, the corporate leased line segment is currently its core source of income, accounting for 92% of the firm's revenues in 1H10.

France Teelcom In Bid For LION2 Cable

Click For Larger Image - Source France Telecom

France Telecom and the other members of the LION2 consortium have signed an agreement to build a new submarine cable in the Indian Ocean. The agreement comes less than a year after the inauguration of the LION (Lower Indian Ocean Network) submarine cable linking Madagascar to the rest of the world via Reunion Island and Mauritius.

With this latest agreement, France Telecom enters the second phase of its Indian Ocean development plan, pursuing its strategy for the regional expansion of broadband internet.

The 3,000km LION2 cable will extend the LION cable to Kenya via the island of Mayotte. The cable will provide Mayotte with access to a broadband internet network benefiting from a transmission capacity and service quality equivalent to those available in Europe. For Kenya, LION2 is an important project that will strengthen its connectivity to international networks and cover its capacity requirements for years to come. The project is being conducted by a consortium of France Telecom and its subsidiaries Mauritius Telecom, Orange Madagascar and Telkom Kenya, along with carrier companies Emtel, Societe Reunionnaise du Radiotelephone and STOI Internet.

The construction of the LION2 cable represents a total investment of around EUR56.5 million, about EUR31.25 million of which will come from France Telecom. Service is scheduled to begin in the first half of 2012.

LION2 relies on wavelength division multiplexing (WDM), enabling capacity to be increased without additional submarine work. The maximum potential capacity is 1.28Tbps. Two new landing stations will be built, one in Kaweni for Mayotte and the other at Nyali near Mombasa for Kenya. The second of these is doubled up with existing stations and will be used to redirect traffic if needed.

CCK Extends SIM Registration Deadline, Again

The Communication Commission of Kenya (CCK) has granted Kenya’s mobile phone operators a further two week reprieve in their drive to register the details of the nation’s mobile phone users. The most recent deadline passed on 31 August, and the CCK insisted that the country’s four mobile phone operators - Safaricom, Zain Kenya, Telkom Kenya and Essar Telecom Kenya - file their subscriber listings by 16 September. In the wake of another missed deadline, the CCK has once again extended the exercise, allowing operators until the end of September to lodge their subscriber lists with the regulator. The operators have defended themselves, arguing that the government is still seeking a parliament-approved legal framework to give force to the registration requirement.



According to CCK reports, a total of 12.42 million mobile users have registered their details to date, representing 61.6% of the country’s 20.8 million subscribers. Market leader by subscribers Safaricom is leading the registrations with 13.8 million registered subscribers out of its client base of 16.24 million (85%), followed by Zain with 1.96 million of its 2.8 million subscribers (70%). Rene Meza, managing director of Zain Kenya commented: ‘The exercise is going on well and data is currently being compiled and will be submitted to CCK on September 30, 2010. The figures will then be released by the regulator accordingly.’

SIM Registration Deadline in Kenya Ends, Users Given Upto 16th September

Kenya’s four mobile phone operators will be required to disconnect any subscribers that have not registered their SIM cards by 16 September, it has been announced. The ruling follows the conclusion of the national SIM card registration exercise, whose deadline expired on 31 August.

Information and Communication Permanent Secretary Dr Bitange Ndemo has confirmed that operators have been given 15 days to compile updated subscriber databases following the two-month exercise.

Although disconnections are technically left to the operators’ own discretion, Dr Ndemo suggested that it is in their best interests to do so: ‘If I was to report that someone perpetrated a crime against me and the police went to the operator and find the number is not in their register, then the operator will be held accountable’.

According to the CCK, approximately 80% of subscribers have complied with the government directive. At 25 August market leader Safaricom had registered 84% of its subscribers, Zain Kenya 65%, and Telkom Kenya (Orange) 50%, whilst Essar Telecom reported the lowest rate for registration, with just 29% of subscribers submitting their details.

Based on total subscriber figures and market share per network, this means that around four million of Kenya’s 20 million mobile phone subscribers could find themselves disconnected later this month. Charles Njoroge, Director General of the Communications Commission of Kenya (CCK) said that all operators are obliged to inform subscribers before disconnecting them for non-registration.

Orange Joins Kenya Tariffs War

Telkom Kenya, which operates Kenya’s smallest cellco by subscribers Orange Kenya, has become the fourth and final operator to enter the ‘price war’ that has dominated the wireless sector since regulator the Communications Commission of Kenya (CCK) cut its interconnection rates by 50% last week.

Telkom has responded by reducing its own rates to KES2 (USD0.024) for calls within the Orange network, while calls to other networks will be charged at KES4 per minute, for both post- and pre-paid subscribers.

Meanwhile, when announcing the company’s new mobile tariffs, Telkom CEO Mickael Ghossein complained that the CCK had not consulted him before lowering the interconnection rates for fixed line services. Mr Ghossein commented: ‘We have taken issue with the CCK’s decision to set the interconnection rate for fixed lines with GSM at KES1.67, on the basis that it was too low to be sustainable and did not take into account running costs as well as network maintenance costs. We can easily close shop if we charge less than KES3 for off-net calls. The market is in a big mess. What other players are doing is not professional. My strategy is to sustain the company and grow revenues. Voice is dead, broadband is the future. At Telkom Kenya, with the enormous broadband resources we have, it is at our advantage as others fight.’

Telkom is the only operator licensed to provide fixed line services within the Kenyan wireline market

CCK Insists On SIM Registration Deadline

France Telecom Resolves Kenya Duspute Over Missing Assets

A stand-off between the Kenyan government and France Telecom - its fellow shareholder in Telkom Kenya - has been resolved after three months of disputes, reports the EastAfrican newspaper. France Telecom, which purchased 51% of the previously state-owned Telkom Kenya for USD390 million back in November 2007, threatened to withdraw its investment after a failure to trace certain assets that were in the books at the time of purchase.

A joint statement from Treasury Permanent Secretary Joseph Kinyua and Michel Barre of France Telecom read: ‘The Government of Kenya and Orange East Africa SA, a subsidiary of France Telecom SA, are pleased to announce that they have resolved the outstanding shareholder issues regarding the privatisation of Telkom Kenya in December 2007’.

The shareholders said they will now focus on enhancing their partnership, in order to make the company a world-class player for the benefit of its customers and other stakeholders. The statement added: ‘France Telecom Group further confirms its commitment to Kenya as a long-term strategic investor through its participation in Telkom Kenya, which it continues to support through its global ‘Orange’ brand. The Group will continue to provide strategic and technical expertise in order to transform the company and develop innovative products and services’.

Telkom Kenya To Get Loan For 3G Licence Fee

Reuters reports that Telkom Kenya will get a shareholder loan from the Kenyan government to enable it to pay the USD10 million 3G licence fee.

‘We are giving them a shareholder loan through which they will pay [for the 3G licence] so it is actually funded by Telkom itself through a shareholder loan by the government,’ Esther Koimett, investment secretary at the Ministry of Finance, told Reuters.

Although she did not say how much the loan will be, the communications regulator charges operators USD10 million for a 3G licence, under a new fees structure unveiled this month.

Safaricom Profits Up 44%

Safaricom, Kenya’s largest mobile network operator by subscribers, said full year profit jumped 44%, as revenue from data services - including its mobile money transfer service MPESA - increased. Net income climbed to KES15.15 billion (USD190 million) in the twelve months to 31 March 2010, from KES10.5 billion a year earlier.

Sales climbed 19% to KES83.96 billion. Safaricom, which is 40% owned by Vodafone, competes with Telkom Kenya, Zain and Essar Telecom Kenya; at the end of March it claimed 15.79 million customers.

Kenya SIM Registration Deadline is July 30

Kenya’s 20 millions mobile subscribers have been given until July 30 2010 to register their SIM cards or risk disconnection.

This comes on the back of a directive from the government, ordering mobile service providers to register all subscribers in a bid to reduce cell phone related crimes.

Speaking at an event on Monday, Communications Commission of Kenya (CCK) Director General Charles Njoroge said mobile operators would also be required to regularly update their subscribers’ personal details.
“This exercise is bound to enhance our general security and I would like to urge operators to make the process easy and friendly for subscribers,” Mr Njoroge said.

According to Capital FM, subscribers are now required to furnish their line operators with postal and physical addresses, date of birth and alternative telephone numbers, as well as their identity card numbers.

Information and Communication Permanent Secretary Bitange Ndemo said the ministry was fast tracking the implementation of the Data Protection Bill, currently before cabinet, to ensure the data collected can be used by the police force.

Commenting on this development, Zain Kenya Managing Director Rene Meza said: “We understand the process is very important and will therefore take time. We would like to urge the government and the CCK not to give us a cut-off date because we will have to actively engage with all stakeholders.”

Telkom Kenya Chief Executive Mickael Ghossein echoed Mr Meza’s sentiments adding SIM card registration brings with it a number of challenges.

“The main challenge for the future will be the accuracy of the data because while we register we are not sure whether the data we are given is correct,” Mr Ghossein said.

France Telecom Wants Payment From Kenya

According to local press reports, the first phase of negotiations over the KES28.9 billion (USD385 million) claim which France Telecom (FT) has submitted to the Kenyan government has ended amid secrecy. The French company is demanding the payment following complaints about Kenya’s competitive environment and a scathing attack on the market dominance enjoyed by rival operator Safaricom. Sources familiar with the negotiations told

The EastAfrican newspaper that in addition to the original USD385 million claim, FT has lodged an additional claim of USD300 million on the grounds that Telkom Kenya’s former management concluded a deal with equipment supplier Rapid Communications weeks before the French took over, thereby denying FT a chance to negotiate a deal under whose terms it would inherit future debts.

Kenya To Introduce Mobile Number Portability From July

 Kenya's telecoms regulator has announced that the country's four mobile networks will be required to start supporting Mobile Number Portability from this July. The regulator has been planning to offer MNP in the country for several years, but kept deferring the plans.

The plans, originally announced in 2004 were put on hold in 2007 after the regulator cited the high costs of implementing the system. They were then resurrected in late 2008 for launch between March and September 2009. It now seems likely that the launch will finally occur in the middle of this year.

Subscribers will be charged an administrative fee for each time they port their number to a new operator, although the fee is still to be worked out with the operators.

Typically in most countries where MNP has been introduced, the smaller players tend to see a short-term jump in subscriber numbers at the expense of a dominant player - in this case, Safaricom.

The Mobile World subscriber database reports that Safaricom is the market leader with a market share of 82% with Zain  coming in at 11.3%. Newer entrants, Econet had 2.3% of the market while Orange (Telecom Kenya) had 4.1% of the market.

The regulator has also commissioned Analysys Mason to conduct a study into the market for wholesale and retail termination rates. The operators have until 7th May to respond to the survey.

Telkom Kenya To Focus More On Broadband

Telkom Kenya has announced that it will shift its strategic focus in 2010 as it attempts to recover following a net loss of KES10 billion (USD124.6 million) in 2009, reports Business Daily.  Telkom Kenya generated revenues of KES11 billion but turned the net loss as higher levels of competition saw industry profit levels plummet as operators dropped their prices to gain market share.

Telkom Kenya CEO, Mickael Ghossein, said the company had encountered severe conditions in the last trading year that had affected its ability to generate profits. He added: ‘We are now focusing on providing quality services, innovating and providing value for money. Our grand plan is to move the market towards true broadband connectivity, offering speeds of up to 8Mbps.’

“You Sold Me An Empty Box”, France Telecom Tells Kenya Government

France Telecom has kicked up a storm with a claim that it is unable to trace some assets that were on the books of the former parastatal at the time it was put on sale.

“You sold to me an empty box,” is the claim by the French state-owned company – one of Europe’s leading telecommunications providers, which beat seven international bidders in 2007 to acquire a controlling stake in Telkom Kenya. The company now wants the government to compensate it to the tune of a massive Sh28.875 billion – an amount almost equal to what it paid for its 51 per cent share of Telkom Kenya.

As part of preparations for the sale of Telkom Kenya, all the information about the company, including assets and audited accounts for five years, was deposited in a data room to which all interested bidders were allowed access. Did unscrupulous individuals grab assets of Telkom Kenya between the time the data room was established and the time of the actual sale to France Telecom? Is the French company to blame for not having conducted a proper due diligence before signing on the dotted line?

These are the pertinent questions at the heart of a dispute that has cast doubts on the integrity of one of the largest privatisation transactions in the history of Kenya, in which the government pocketed a whopping Sh29.25 billion.

Both sides are still tight-lipped. A party who was involved in the transaction for France Telecom revealed that actual negotiations between the government and the French company were yet to begin. He pointed out that the view from his side was that the matter should be kept away from the media attention for now.

An e-mail with questions sent to France Telecom’s Michel Barre, who was said to be visiting Nairobi to engage the government on the dispute, went unanswered. Neither did the government side want to release details of the dispute.

But sources confirmed to the Nation that the government had engaged a Nairobi law firm to lead the negotiations with France Telecom. Negotiations begin in earnest on March 21. Aside from assets that the French company claims have disappeared from Telkom Kenya’s books, it is also accusing the government of non-disclosure of material contracts at the time of the transaction.

The French claim that after taking over, they stumbled on supplier contracts with huge liabilities that had not been disclosed in the data room at the time. More questions: Did some people in Telkom Kenya rush to commit the company to opaquely procured supply contracts between the time the data room was opened and the time France Telecom took over?

The French have reportedly questioned the integrity and accuracy of Telkom Kenya’s audited accounts lodged in the data room at the time of the transaction. Further, France Telecom is accusing the government of non-disclosure of material information with respect to tax liabilities, uncollectable debts, suspense accounts and unreconciled bank accounts.

Technically, the claims by the French are based on what is referred to in legal terms as warranties – where a party is allowed to claim monies from the seller if it turns out later that all facts were not fully disclosed before the transaction was concluded.

- Daily Nation