Kenya: Sasktel drops out of Kenya fixed-line operator licensing

  17 March 2004 – According to a Reuters report, Canada's regional telecommunications operator Sasktel is no longer interested in acquiring Kenya’s second national fixed-line license, officials said.

Sasktel was one of five companies prequalified by the Communications Commission of Kenya (CCK) to bid for the license, which will likely be awarded by June 2004. The other bidders are: a consortium of China Network Corporation International and China's telecommunication equipment maker ZTE Corp, Norway's Telenor, Germany's Deutsche Telekom and a consortium of Kenya's Pegrume Group Ltd. and TCIL India, Tata India.

CCK spokesperson Mutua Muthusi said Sasktel has shown no interest since they prequalified in January although they have not officially withdrawn. Sasktel did not purchase the bid documents required by CCK, and on Wednesday the firm was absent from a meeting where the CCK answered questions from the bidders.

"For all practical purposes, we don't expect them to go ahead with the bid," Muthusi said.

Kenya’s government is counting on the second national operator to boost competition and improve the country’s telecommunications sector. Muthusi said the remaining bidders are concerned about government plans to fix a reserve price for the license. In the past, CCK awarded telecommunications licenses without the use of a reserve price. Bidders said they are concerned that they could potentially invest heavily in the bidding process only to be thwarted by an unrealistic reserve price.

"I think they should let the market decide. The consideration should not be money alone, the capability to improve the sector is very important," said an industry analyst.

Among the criteria used to shortlist the bidders was evidence that they had experience managing at least 500,000 subscribers and had annual revenues of at least US$ 150 million. The winning bidder will be required to give a Kenyan partner a 30% stake in the new operator.

Intelecon Research & Consultancy Ltd. 17/03/2004

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