Thanks Alice The government and indeed the country can easily be arm twisted because the focus is on the short term money considerations paid by the applicant but the loser is the country in terms of the long term build out of the network, quality and lower prices through competition After the current licensing failed in 1) 8 regional telecommunications 2) 2 trunking radio 3) SNO on two occasions 4) third cellular --- do we need to use the regime again? If we do the same thing the same way we get the same results. Our attempts apart from Kencell licence proves beyond doubt the need of a paradigm shift I am just wondering loudly how much it costs to go through such a licence process and how such a colossal loss is accounted for Finally, I expect that any new applicant will demand even more 'privileges' because the market is well taken up by competition. The incumbents had privileges of the huge market and three years of guaranteed market. TKL itself had a privileged captive market for 118 years. Cheers Muriuki Mureithi --------------------------------------- Summit Strategies Ltd - ICT Consultancy & Research in Eastern & Central African markets Contacts : Tel +254 (20) 3875824 , Cell + 254 (722) 520090, email: mureithi@summitstrategies.co.ke alternate email : muriuki.mureithi@gmail.com -----Original Message----- From: kictanet-bounces+mureithi=summitstrategies.co.ke@kictanet.or.ke [mailto:kictanet-bounces+mureithi=summitstrategies.co.ke@kictanet.or.ke] On Behalf Of alice Sent: 20 March 2007 08:45 To: mureithi@summitstrategies.co.ke Subject: [kictanet] [Fwd: [DigAfrica] Kenya cancels SNO offer to Indian firm] They demanded one "too many" privileges Kenya cancels SNO offer to Indian firm By A STAFF WRITER Investigations by The East-African have revealed that Kenya cancelled negotiations with Reliance Communications of India - the company that had been negotiating with the government for a licence to operate both fixed-line and mobile services - because the Indians demanded "too many" privileges. Just a day before the deadline within which the Indian company was asked to formally submit its application, the president of the company, Punit Garg, wrote to the government making demands that were way outside the condition of the tender. According to informed sources, the privileges Reliance wanted were in three sets - namely duties, relaxation of rules for listing of its local subsidiaries on the Nairobi Stock Exchange, and a commitment to share infrastructure from existing mobile companies. With respect to duties, the Indian company wanted the following. First, zero import duties on import of telecommunications infrastructure and equipment; zero import duties on new and used handsets and zero value-added tax. The privileges requested with respect to listing requirements were not only excessive but were of the type that the government could only give at the risk of bending the rules governing capital markets. First, the Indian company wanted the government to give it a commitment that it would allow any local subsidiaries it formed to go to the market to raise money on the Nairobi Stock Exchange regardless of whether or not the company met the requirements for listing. The Indian investor suggested that the local subsidiary it intended to create be listed on the basis of compliance of the parent company in India. Secondly, it wanted the government to permit the listing of at least 10 per cent of the equity of the SNO on the Nairobi Stock Exchange. Thirdly, it asked that the government allow dual listing of the company that it intended to establish in Kenya. On the sharing of infrastructure, the Indian investors wanted assurances on the sharing of towers, co- location of equipment for interconnection and long distance networks. The company argued that duplication of infrastructure in telecommunications networks was costly. The Indian investor further argued that only a harmonised system can ensure ready availability at regulated cost-based tariffs. Reliance also said that it was not willing to put in an application without these assurances and privileges. It is understood that on receiving the demands, a meeting of the board of the Communications Commission of Kenya was hurriedly convened at which the regulator formally announced the cancellation of negotiations with the Indians and the decision to tender afresh. The government will now be hoping that Vtel of Dubai, who had offered to pay a whopping $169 million for the licence, will still want to come and invest in Kenya. Kenya's telecommunications industry is changing rapidly. The two mobile players - Safaricom and Celtel - continue to maintain a stranglehold in a market that more or less operates like a duopoly. Currently, it is estimated that Safaricom has around 75 per cent of the market and Celtel 25 per cent. Both companies have recently been licensed to operate international gateways. Kenya tried unsuccessfully to auction an SNO licence in 2003. In May last year, the CCK put out an international tender for the licence. The successful bidder, Vtel Ltd, was consequently invited to take up the offer but failed to do so following disagreements with its local partners. In accordance with the tender regulations, the offer was subsequently withdrawn and extended to Reliance Communications, the second highest bidders. Upon receipt of the invitation by CCK, Reliance Communication confirmed that they would take up the offer and requested more time to enable them to comply with the various formalities. The CCK board agreed to the request by the Indian investors and granted an extension of the application deadline to March 15 this year. By the expiry of the set deadline of 4.00 pm on Friday last week, the Indian investors had not made a formal application for the licence. http://www.nationmedia.com/eastafrican/current/News/News19030715.htm <http://www.nationmedia.com/eastafrican/current/News/News19030715.htm> __._,_.___ Messages in this topic <http://groups.yahoo.com/group/DigAfrica/message/5760;_ylc=X3oDMTM0NmQ2MHN0B F9TAzk3MzU5NzE0BGdycElkAzI5MDI0NDQEZ3Jwc3BJZAMxNzA1MTE2MjkxBG1zZ0lkAzU3NjAEc 2VjA2Z0cgRzbGsDdnRwYwRzdGltZQMxMTc0MzMyMDE3BHRwY0lkAzU3NjA-> (1) Reply (via web post) <http://groups.yahoo.com/group/DigAfrica/post;_ylc=X3oDMTJwcWdqYzU3BF9TAzk3M zU5NzE0BGdycElkAzI5MDI0NDQEZ3Jwc3BJZAMxNzA1MTE2MjkxBG1zZ0lkAzU3NjAEc2VjA2Z0c gRzbGsDcnBseQRzdGltZQMxMTc0MzMyMDE3?act=reply&messageNum=5760> | Start a new topic <http://groups.yahoo.com/group/DigAfrica/post;_ylc=X3oDMTJlZ3R2azduBF9TAzk3M zU5NzE0BGdycElkAzI5MDI0NDQEZ3Jwc3BJZAMxNzA1MTE2MjkxBHNlYwNmdHIEc2xrA250cGMEc 3RpbWUDMTE3NDMzMjAxNw--> Messages <http://groups.yahoo.com/group/DigAfrica/messages;_ylc=X3oDMTJldnVua3Q5BF9TA zk3MzU5NzE0BGdycElkAzI5MDI0NDQEZ3Jwc3BJZAMxNzA1MTE2MjkxBHNlYwNmdHIEc2xrA21zZ 3MEc3RpbWUDMTE3NDMzMjAxNw--> | Links <http://groups.yahoo.com/group/DigAfrica/links;_ylc=X3oDMTJmb2s0cXYwBF9TAzk3 MzU5NzE0BGdycElkAzI5MDI0NDQEZ3Jwc3BJZAMxNzA1MTE2MjkxBHNlYwNmdHIEc2xrA2xpbmtz BHN0aW1lAzExNzQzMzIwMTc-> | Polls <http://groups.yahoo.com/group/DigAfrica/polls;_ylc=X3oDMTJmaTVyMmlqBF9TAzk3 MzU5NzE0BGdycElkAzI5MDI0NDQEZ3Jwc3BJZAMxNzA1MTE2MjkxBHNlYwNmdHIEc2xrA3BvbGxz BHN0aW1lAzExNzQzMzIwMTc-> | Calendar <http://groups.yahoo.com/group/DigAfrica/calendar;_ylc=X3oDMTJkYTVzcjRuBF9TA zk3MzU5NzE0BGdycElkAzI5MDI0NDQEZ3Jwc3BJZAMxNzA1MTE2MjkxBHNlYwNmdHIEc2xrA2Nhb ARzdGltZQMxMTc0MzMyMDE3> Dig Africa site welcomes you to join us at http://www.yahoogroups.com/group/Digafrica on IT in Africa Aids-Africa is a forum for communication and information on AIDS related issues in Africa and all are welcome to join us at http://www.yahoogroups.com/group/aids-africa Join us on hiv/aids forum on Kenya at http://www.yahoogroups.com/group/kenya-aids Join us at a Kenyan networking forum and NGOS at http://www.yahoogroups.com/group/kenyainternational Yahoo! 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