Kenya to issue telecom infrastructure licenses

NAIROBI, KENYA – Faced with rising infrastructure costs, the Kenyan government is set to issue licenses to companies dedicated to building telecom infrastructure.

Bitange Ndemo, permanent secretary in the Ministry of Information and Communication, said the Communications Commission of Kenya (CCK) will issue the licenses in six months. The move is expected to lower the infrastructure costs for telecom operators. The government will also unveil new guidelines on sharing such facilities, including transmission systems and cables.

“Existing operators are likely to use infrastructure as a competitive advantage but in my view it is unnecessarily expensive to take that path. In six months the government should be issuing infrastructure licenses to develop general infrastructure for both broadcast and communication,” Ndemo said.

Ndemo added that the new licensees will be independent of the existing ones. This will allow telecoms operators to abandon infrastructure and focus on their core activities: sales and marketing. The new companies will be licensed solely to own and develop the infrastructure.

According to Patricia Muchiri, the chair of the infrastructure committee that includes CCK and industry players, a code of practice will be launched in a month. The code was jointly developed by the government and industry and CCK will have the mandate to enforce it.

However, Muchiri is limited by CCK rules from divulging further details of the code. The license will reduce input costs on telecom access providers, which in turn will facilitate reduced tariff and increased tele-density in remote areas.

The issue of infrastructure sharing came to the fore after Kenya’s third GSM (Global System for Mobile Communications) provider, Econet Wireless, expressed its interest in sharing infrastructure with the existing GSM companies Safaricom and Celtel.

The move encountered opposition because the existing companies want to take advantage of “the first mover advantage” and do not want the third-party owner to offer the same towers to subsequent entrants. It is presumed that by the time the third party company rolls out the infrastructure, the existing companies will have made considerable profits.

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