KENYA - IS TIME UP FOR ECONET?

Telecoms

As the year 2005 draws to a close Kenyans are coming to terms with the fact that the entry of a third mobile phone service provider will be long in coming.

Although Kenyan regulator CCK promised that a third mobile service provider would be in the market by the end of 2004, one year down the line Econet's roll-out is yet to materialise and there are no signs that a third mobile phone service provider could get into the market any time soon.

This has left mobile phone users locked in the duopolistic market that is dominated by Safaricom and Celtel International. Though managers of the two mobile phone companies argue that the market structure as currently constituted is good for growth andinfrastructure development, critics have replied that the absence of a third mobile service provider is the reason mobile call costs in Kenya are higher than the regional average.

Call costs aside, the third mobile phones licensing bungle has left thousands of Kenyans who responded to Econet's advertisement of employment opportunities early this year at crossroads.

This was in April when Econet embarked on what appeared to be an aggressive recruitment exercise with a massive presence in the local press and the appointment of Mr Zachary Wazara as the company's managing director.

The advertisements raised hope that the company was finally getting down to rolling out what was already a promise long in coming.

It was however not lost to observers that April was also the month that Information and Communications minister Raphael Tuju turned the heat on Econet by questioning its ability to meet the obligations of the licence it held.

An upset Econet immediately went down the warpath and took the minister to court where the issue remains to date.

According to the license conditions that were given to Econet and obtained by the Financial Standard, Econet had one year to commence the provision of the licensed services.

The licence was granted on November 10, 2004 (the "effective date") for a period of 15 years.

The Communications Commission of Kenya however reserves the right to "at any time revoke the licence by giving a six months notice in writing."

The licensing document enumerates the circumstances under which the commission may revoke the licence as failure to commence the provision of the licensed services twelve months from the effective date and failure to pay any amount due for the licence 45 days after the commission notifies the licensee that the payment is overdue.

Going by the first count, Econet was bound to have commenced operations by the second week of this month.

Last week, the Financial Standard learnt that top government officials have been holding talks with Econet and the CCK about getting the company's operations off the ground. CCK declined to answer any queries on the status of the licence and the discussions.

East African Standard