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Kenya: Telkom wireless service creates controversy Print E-mail
Wednesday, 18 July 2007
Telkom Kenya has dismissed accusations from rivals that it is offering mobile service before acquiring the appropriate license.

The dispute over Telkom's mobile license is part of the ongoing competitive battle being waged by Kenya’s main telecommunications operators. Telkom's chief operating officer, Daniel Kibira, said the company has a total of nine licenses and is authorised to operate a wide range of telecommunication services.

"We are awaiting a decision by the Telecommunications Commission of Kenya (CCK) but we were licensed to operate many services long before even (specific) mobile licenses were given," Kibira said.

Celtel started the latest round of discussions among operators when it accused the government of having a double standard by allowing Telkom to operate without a mobile license.

"Why is it that Telkom is allowed to operate without a license? Why is it they do not pay taxes," asked John Murray, Celtel’s managing director.

Kibira says that the accusations should be ignored and that the issue is being addressed by CCK. The accusations followed Telkom's surprise launch of new tariffs and products over its new 3G wireless network, a response to the competitive struggle taking place between Celtel and Safaricom. The operators have a combined subscriber base of about nine million - 6.8 million of those subscribers are with Safaricom.

Telkom announced it has signed up 70,000 subscribers since it launched its wireless network, which uses CDMA2000 technology, as opposed to its two rivals, which operate GSM networks.

Despite being competitors, Telkom Kenya owns 60% of Safaricom. The Government is due to sell its holdings in both Safaricom and Telkom.

Kibira explained that US$ 51.4 million would be spent to upgrade the Telkom network and expand its coverage. Telkom launched its wireless network after having its underground cables vandalised. Last year alone, vandals cost the company around US$ 7.4 million.

Source: East African Business Week - WDR/Intelecon Regulatory News.