[Nairobi, KENYA] – The application for a licence to act as an Internet Service Provider (ISP) by Kenyan national telecoms company, Telkom Kenya , is not likely to meet with success according to industry analysts in the country. The Kenyan government is not likely to agree to Telkom’s request unless the
company opens up the telecoms industry to other players, a move which analysts
agree would disadvantage the national telecoms company.
Telkom Kenya recently had their three-year telecoms monopoly in the country
extended by an additional two-years.
Should they decide to forego this monopoly in order to enter the ISP market, this
would devalue a current share offer of 49% which is being marketed to potential
strategic partners by the telecoms company.
The application has also met with opposition from Kenya’s licenced internet service
providers.
As these ISP’s make use of the Telkom Kenya-controlled internet backbone JamboNet,
they fear that the national telecoms company would be able to use this competitive
advantage to stiffle the opposition.
If the monopoly on Telkom’s exclusive services is terminated, however, the company’s
profits would be substantially reduced as the current JamboNet monthly connection
fee of $3,375 would drop to less than $1,000 in the hands of other operators.
Swift Global MD Richard Bell commented that granting the licence would undermine
the Kenyan Internet industry.
“It would be impossible for ISP’s to deal with Telkom Kenya as a monopoly supplier of
services on the one hand and as a competitor on the other,” he said.
The ISP’s have indicated that they will pursue legal action should the application be
granted.
The Communications Commission of Kenya (CCK) confirmed that they are still
studying the application as well as statements from those opposed to the application.
Insiders indicate that the CCK are analyzing whether it would be possible to approve
the application without opening up Telkom Kenya’s exclusive services to other
operators.
