Govt seeks partner for 4G network

September 5, 2011
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, NAIROBI, Kenya, Sep 5 – The government is seeking private investors to construct a 4G communications network in Kenya.

The 4G or fourth-generation Long Term Evolution (LTE) services network offers subscribers access to mobile Internet at much faster speeds, making it an innovative tool for companies.

The Ministry of Information is looking to roll out the network through private public partnerships, and has since changed the licensing regime, insisting that licenses would not be handed out to individual operators.

Instead, the license will be handed out to a consortium firm, which will implement and manage, setting a stage for joint ownership of the data spectrum.

“The government envisages a Private Public Partnership model in which the government will undertake to provide the necessary frequency spectrum resources as its contribution, while the private sector will undertake to meet all other costs related to the deployment and operations,” Information Permanent Secretary Bitange Ndemo said.

The government’s move comes at a time when the mobile operators are shifting focus to data, with competition in the voice segments getting stiff and revenue starting to decline following tariff wars.

The fall in voice revenue has caused the telecommunication operators to intensify their activities in the data segment, which analysts say will be the key revenue driver in future.

Those tendering for the license will be have to meet stringent requirements to qualify.

For starters, the company will have to be a licensed infrastructure provider with a network facilities provider tier one license (the technical reference to mobile phone operators’ licence).

Potential investors will also be expected to have at least 20 percent Kenyan shareholding and demonstrate financial and technical capability to roll out commercial services within a year of forming a partnership with the government.

Safaricom is the only operator that has tested 4G. The operator was also the first to commercially roll out a 3G network in the country.

To date Airtel and Telkom Kenya have also acquired 3G licenses with the latter also launching 3G services in August in Nairobi, Mombasa and Nakuru.

With the licensing requirements, only Safaricom and Telkom Kenya are eligible for the license as they are the only holders of the Network Facilities Provider Tier 1 category and with a 20 percent local shareholding.

The two companies have also have announced plans to form a jointly owned tower management company making a synergy by the two all the more possible.

With 900 3G sites spread across the country, Telkom Kenya expects to increase the number to 1,500 within the year as demand for data services increases in the country.

Of the current 900 sites, 230 are scalable to 4G.

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