3G: Safaricom counters Zain

October 23, 2009

, NAIROBI, Kenya, Oct 23 – Safaricom boss Michael Joseph has taken issue with the proposal to the Communication Commission of Kenya (CCK) to reduce the licensing fees for the 3G technology as a way of facilitating the launch of the services by other operators.

Mr Joseph argued that if the CCK yields to pressure by some mobile operators to review the fees downwards, then all players should benefit from such a move.

“From a fairness point of view, everybody should pay $25 million (Sh1.9 billion) for that licence. If they (other operators) are going to be given a special dispensation, then I believe that dispensation should be applied to us as well,” he told Capital Business.

Safaricom was awarded a 3G licence by the CCK in 2007 after paying Sh1.9 billion for the spectrum costs in a move that heralded the provision of enhanced voice and high speed data services.

Mr Joseph was reacting to remarks by his competitor Zain Kenya Managing Director Rene Meza who on Wednesday expressed confidence that the regulator would lower the licensing fee for 3G services to enable them penetrate the market.

Mr Meza had told reporters that the Sh1.9 billion ($25 million) as spectrum cost was high and had delayed their plans to introduce the technology in the market.

“The $25 million does not make business sense for three of the mobile operators in the market today. After discussions with the CCK, we concluded that the spectrum costs will be revised downwards to allow the operators to launch the services in the market,” he said then.

Mr Joseph however said as the regulator, CCK had the obligation of ensuring a level playing field for industry players.

“You can’t have one rule for one operator and another rule for another operator,” he complained.

Mr Joseph also said the suggestions to implement any policies such as the proposed “Dominant Player Framework” would have to be agreeable to all operators.

Mr Meza had again hinted that the framework, which would allow the mobile operator with the biggest market share to pay the highest interconnection fees while the smallest operator would pay the lowest charge, was likely to be implemented before the end of the year.

The Safaricom CEO however said they were not party to those discussions but they needed to be consulted and reach a consensus before any of the policy measures are executed.

“I’m sure all these things will result in consultation not just with Zain but with all the operators and at the end of it we will come to a common ground,” he said.

Safaricom’s market share stood at 77 percent as at March 2009 with a subscriber base of 13.3 million making it the biggest player in the local telecommunications market.

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