Kenya’s TEAMS registers to avoid rumours about ownership
Government-backed high speed Internet connection, The East African Marine System (TEAMs), has been registered afresh to assure potential investors of its ownership, it has emerged.
Speculation over the ownership of the cable had prompted some potential investors to seek a clarification from the Government, forcing it to act. There have been claims that the cable is jointly owned by a local politician and two foreigners with the Government merely acting as a front.
Dr Bitange Ndemo, the Information permanent secretary, said the company had been registered as TEAMs to distinguish it from TEAMS Limited whose ownership had been questioned. "TEAMS Limited was registered by a private law firm with the instruction from regulator and is not privately owned," Dr Ndemo said."Our suspicion is that these rumours are being generated and circulated by agents of competing submarine cables," he said.
The PS said that the rivalry between TEAMS and its competitors had escalated mainly due to its pricing model. "We have not been keen on making TEAMs a profit-generating venture. Rather the Government intends to make money from the taxes it will collect from the businesses that will rely on it," said Dr Ndemo.
Industry sources told Business Daily the rivalry had escalated to a level where agents of a competing cable had convinced the Communications Commission of Kenya (CCK) board not to guarantee the project.
The Ministry of Finance is said to have allowed the Ministry of Information to ask the CCK for a $59 million guarantee to enable French firm Alcatel - the company that won the tender to lay the cable - to start the work.
Treasury said the decision to ask for a CCK backed guarantee was informed by the fact that Parliament was not in session. Last week, it emerged that a new deal had been struck to have Citi Bank offer the guarantee.
The Government of Kenya, through the East Africa Marine Systems, owns 85 per cent of the project while Etisalaat of the United Arab Emirates owns 15 per cent. Locally, a number of telecoms sector operators have been invited to buy a stake in the company.
Safaricom has been positioned as the anchor shareholder with an offer of 30 per cent ownership. The Government will remain with 20 per cent while the regional operators will have 50 per cent. "Government should not be in business and for us to obtain the landing rights we had to look for a private company" said Dr Ndemo.
The laying of the cable is expected to kick off next month. The Government will pay a deposit of $ 9.5 million.