Another Kenyan firm gets 3G license

June 25, 2010

, NAIROBI, Kenya June 25- Zain Kenya has obtained a 3G license from the Communications Commission of Kenya (CCK) as it seeks to grow its data services business.

The company paid the $10 million (Sh815 million) license fee after CCK reviewed the spectrum cost for 3G from the previous $25 million.

This makes Zain the second mobile operator after Safaricom (2007) to roll out 3G services.

Speaking while handing over the license on Friday, CCK Director General Charles Njoroge said the issuance of the license to a second operator would ultimately benefit Kenyan consumers as the demand for data services continues to rise.

“The move to 3G by service providers is inevitable. Provision of innovative services via high-speed broadband data is the next frontier for competition in the mobile telephone sub sector,” Mr Njoroge said.

Despite registering 50 percent mobile phone penetration in Kenya, the number of people with access to broadband Internet is still much lower, a situation expected to change with the more players using 3G.

Zain Kenya Managing Director Rene Meza said piloting of the 3G network is set to begin in July and anticipates countrywide rollout of the service by the end of the year.

“Effective today Zain Kenya owns 10megahertz on the 3G spectrum and we have already finalised our partnership with world class vendors to begin the role out of our network country wide,” he said.

Mr Meza said the rollout of its 3G network is expected to drive its customer base up.

The data business plays a major part in Zain’s overall business and was able to post a 35 percent increase last year largely on its 2G network.

Safaricom has benefited from its early acquisition of a 3G license, posting a 72 percent growth in revenue from the data segment in its year ended March 2010.

The operator has however been vocal in its disapproval of the lowering of the licensing fee for 3G, and sought a refund of the difference for the $25 million it paid in 2007.

Mr Njoroge has in the past said:  “When we review our prices, I don’t think you (operator) get compensated,” adding CCK had not received any official communication from Safaricom on the same.

Telkom Kenya has also announced plans to set up a 3G network the end of the year.

Telkom Kenya is currently running a 3G pilot program it began in December in 10 locations for its corporate customers.

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