Trends & Forecasts

Telkom Kenya: 3G regulators overcharging for licence fee

Telkom Kenya is worried that its deployment of a 3G network in Kenya will be threatened by the US$25 million licensing fee set to be imposed by the Communications Commission of Kenya. The company believes that the fee will mean less money for mobile development...

Kenya’s telecoms industry is expressing concern that what it calls exorbitant licensing fees will stifle the development of mobile technology in the country. In particular, Telkom Kenya’s deployment of its 3G network is said to be hanging in the balance because the Communications Commission of Kenya (CCK) wants to impose a US$25 million licence fee.

 Telkom Kenya Chief Executive Mickael Ghossein spelled out the risks, “The CCK should reduce the licence fees as it could ultimately be a barrier to deepening communication services.” Mickael Ghossein went on to say that licences to operate similar networks are provided free of charge in certain African countries. He laid down the challenge to CCK to do exactly the same - even if it meant the licence came with certain terms and conditions.

 Telkon Kenya has submitted a set of proposals to CCK which take into account various scenarios during the deployment of the 3G network. Most favourable would be even sharing of revenue and obligations in exchange for receiving the 3G network licence free of charge. If a compromise could be attained, then deployment could start commercially by March 2011; Telkom Kenya, which has already invested US$3 million in the project would, for example,  become the first  GSM operator in Kenya to market video-conferencing services.

Telkom Kenya uses the Orange brand to provide wireless and Internet services such as Orange Mobile, Orange Fixed Plus and Orange Broadband. Orange has warned that commercial deployment of 3G could be halted if CCK does not lower what it calls “way out of reach” fees.

The current situation is that Orange is carrying tests for the 3G network in partnership with Ericsson; this test run is due to be completed by October this year. Fifteen sites have been selected from Jomo Kenyatta International Airport and from a major Kenyan business district. Despite what is now a stand-off between Telkom Kenya and CCK, the testing goes on.

If successful, Orange would be the second Kenyan mobile network to commercially deploy 3G services. Safaricom is at present the only 3G operator in the country (since 2007). It paid the US$25 million licence fee, and has argued that as it paid the fee every other 3G operator must do the same. Zain Kenya applied for a licence in early 2009 but wanted to review the fee.

More info:



More Articles you may be Interested in...