The decision by the Kenya government to license a second national operator to compete with Telkom Kenya in the provision of international VSAT networks and the Internet node and backbone, has has been welcomed by the Internet service industry but with reservations. The announcement comes in the wake of rising concern among Internet service providers (ISPs) over the slow pace at which the government is liberalizing the industry.

Despite the recent announcement by CCK that four companies would be licensed to end Telkom’s monopoly of the Internet gateway, the ISPs say that no systems have been set up to incorporate more players, such as pre-qualification and fee requirements.

Transport and Communications Minister John Michuki has directed CCK to ensure that Telkom has a competitor by June 2004, when its monopoly legally ends. According to the Poverty Reduction Strategy Paper launched by the government in June, in addition to licensing a second national operator, four companies are to be licensed to compete with Jambonet. But industry analysts say that Mr Michuki’s directive that the second operator would offer Internet services may lead to inefficiency such as that experienced at Telkom.

The Permanent Secretary for Communications, Dr Gerishon Ikiara, says that the government is still consulting and will issue a clarification in due course.

The ISPs say that what the country needs is not "another Telkom," but an independent company to specialise in Internet gateway provision.

Sources at CCK say they have to consult with the ministry on the way forward as the commission is not sure whether to register Jambonet’s competitors in tandem with Telkom’s.

"This confusion," says an ISP operator, "creates the need for an independent Ministry of Information and Communications Technology (ICT). ICT is a complex and dynamic industry, requiring special focus, which it cannot get from the current set-up where it is mixed up with roads, railways, ports, airlines and others."

An industry expert says: "What the ISP industry needs is to be granted licences to uplink and downlink without passing through controls," adding that Kenya is the only country in East Africa without this connectivity, explaining why the country lags behind Uganda and Tanzania in the development of the Internet sector.

"The fear that has gripped the industry is that the government looks keener to licence a second operator, knowing that this may not happen soon, than to license Internet gateway providers. This is tantamount to buying time to extend Telkom’s monopoly," a source said. The source points out that the government is unlikely to open Telkom to competition before it is privatised, leading to the likelihood that it could take 24 months before a second operator is licensed..

The confusion that Michuki’s announcement has generated raises concerns about whether proper consultation was done. The ISPs say they were not consulted, Dr Ikiara and CCK say that they were consulted.

Sammy Buruchara, chair of Telecommunications Service Providers of Kenya (Tespok) told The EastAfrican that the government was reluctant to open up the sector because of the existing policies, which were drafted to favour Telkom’s monopoly. "Any problem at Jambonet affects all ISPs; and recently, there have been lots of problems," he said, adding that a competitor for Telkom would create a duopoly and was therefore not a solution to the problems faced in the provision of Internet services.

The East African