JOHANNESBURG, South Africa-Six cellular phone companies, including a consortium led by South Africa’s MTN, have been prequalified by Kenya’s Communications Commission to bid for a second mobile phone license in the country.
However, mixed signals about deregulation are being conveyed by Kenyan Transport and Communications Minister William ole Ntimama. As news of the prequalification broke, he said the government planned to ask parliament to amend the law to give Telekom Kenya a five-year monopoly on providing core telecommunications services in Nairobi.
Ntimama said the move was to help the state-run utility offset a US$270 million debt it inherited from the former Kenyan Posts and Telecommunications Corp. Analysts said such a move would be a disincentive to potential investors.
The former KPTC was split into separate postal and telecom divisions last year, creating Telekom Kenya ahead of the sector’s liberalization. The successful bidder is expected to offer competition to Safaricom, the cellular arm of the state-run Telkom Kenya.
The other bidders are France Telecom, GTE/Orascom, Vivendi Telecom, Millicom International and Investcom. Government policy requires the bidders to have a 60-percent local component in the shareholding, and MTN has teamed up with Kenyan-registered Telia and Triton to meet the requirement.
If successful, an MTN presence would complete the company’s east African loop, which already reaches Uganda, Rwanda and Tanzania, with a subscriber base of about 60,000.
The head of the Kenya Communications Commission said the second operator would be licensed by March and initially will be in the market for five years competing with Safaricom. The market then will be reviewed to determine if it can support a third GSM operator.
The six prequalified firms will participate in a final vetting process and are expected to have submitted tender documents by 1 November.
