Intel has been keen on nurturing the growth of ICT in Kenya and East Africa. The more ICT is ingrained in our day to day lives, the more computers people buy. Most of these computers contain Intel chipsets, translating into a better bottom line for the company. After all, Asia contributed to half of Intel's revenue last year, with strong performance from countries like Brazil and India.
It was therefore no surprise when Intel approached the Communications Commission of Kenya (CCK) with a suggestion. Kenya had a booming telecommunication sector after its liberalisation in 2005. Long Term Evolution of data (LTE) was picking up in developed countries, and would soon be in Kenya. Safaricom has already been testing LTE awaiting the allocation of needed frequencies to roll out a 4G LTE network.
Safaricom is so impatient that they were involved in a spat with CCK over the delayed release of the frequencies through phasing of analogue TV broadcasting to digital broadcasting .
Normally, frequencies are auctioned and the winning bidders deploy a network on the frequencies. However, Intel was suggesting a model where instead of having the frequencies auctioned to one or two players, the frequency would be issued to one player, who would become a carrier of carriers.
The carrier of carriers would set up a nationwide LTE network and resell capacity to other players, including mobile network operators (MNOs) like Safaricom and other Service Providers including Internet Service Providers.
Intel's suggested model would ensure LTE would be rolled out nationwide at a low cost and faster pace. In addition, high speed Internet would become more affordable since many firms would now be competing on products and cost.
CCK has a unified licensing framework that allows any of its licensees to offer any communication service, as long as they have spectrum. This has seen firms such as Zuku offering telephony, while Safaricom sells fixed Internet connectivity, such as fiber and wimax. ISPs such as AccessKenya and KDN also have the same right to bid for LTE frequency as mobile operators since they too can offer mobile services.
Another issue plaguing the rollout of LTE is the frequencies, which the Department of Defence(DoD) is yet to release. CCK has approached severally requesting for the frequencies and they have agreed. The stumbling block has been Treasury, which has failed to give the recommendation to move the military to other frequencies a go through. This is despite the CCK affirming that revenues from sale of the 2500 MegaHertz frequency range would be enough to cater for the associated cost of the above.
In addition, CCK says that the spectrum that will be released when the military moves to other frequency isn't much , and can only be auctioned to a few operators . Each operator occupied some band of spectrum and the available 2500 Mhz range may not even be enough to share among Kenya's four MNOs.
Intel's suggestion for the whole band of spectrum to be operated by a firm that would resell to retailers was therefore a silver bullet to tackle two issues - lack of enough spectrum and a faster , cheaper and affordable roll out of LTE. The "carrier of carriers" would be barred from selling LTE to end users in a bid to ensure that they would not compete with resellers.
CCK then advised Intel to approach Dr. Bitange Ndemo with the suggestion, as he was best placed to come up with the corresponding policy. Ndemo was expected to constitute a task force that would consist of CCK, the National Communication Secretariat ,Kenya ICT Board, eGovernment , Vision 2030 and the Public Procurement Committee amongst others.
The Task force was supposed to develop a Public Private Partnership framework in accordance with the new public procurement guidelines, a process which would take several months.
However, CCK was surprised when the Ministry of Information and Communications (MoIC) advertised a pre-qualification of tenders in two days, without consulting CCK.
Sources at CCK say the process was bound to raise a lot of controversy due to one of its term, which appeared to favour one operators. A clause in the pre-qualification requirements stated that the bidder must be a tier one licensed operator in Kenya.The process was however later scrapped.
MoIC has now preferred a PPP model similar to that of The East African Marine System (TEAMS) where interested telecommunication players are invited to invest a stake in a holding company . Respective stakes will then be converted to capacity in the LTE network.
The new model has not been a smooth sailing. The process has attracted players ranging from MNOs like Safaricom and equipment vendors including AlcatelLucent. Safaricom has allegedly questioned the presence of AlcatelLucent, an equipment vendor in the process. Safaricom is worried that this may dictate the project to choose AlcatelLucent equipment to deploy the LTE network.
Safaricom has been a long term partner with Huawei who have been supplying majority of their equipment. Chinese equipment vendors such as Huawei and ZTE tend to be far cheaper than other Western based vendors.
It is alleged that AlcatelLucent has remained adamant , saying that they have equal rights to be stakeholders in the holding firm as Safaricom .Sources allege that the Safaricom-AlcatelLucent stalemate has seen the two boycotting several meetings , throwing the process further into disarray.