Kenya plans single wholesale LTE network
Government aims to bypass competitive auctions and appoint consortium to build and manage single 4G system
Published: 30 August, 2011
READ MORE: Spectrum | Kenya | MVNO | Regulator | LTE
Building a single LTE network and supporting many mobile operators via wholesale agreements will be a common pattern in 4G. Kenya is the latest country to study this model, as an alternative to the usual competitive auction process.
The wholesale approach will be seen in developed economies, often as a defensive move by smaller players against incumbents, as with the various US 4G ventures such as Clearwire and LightSquared. In Russia a shared network in already allocated WiMAX spectrum is planned to kickstart LTE build-out, even as operators and the regulator bicker about further spectrum bands.
Kenya's idea is more radical still, bypassing the whole process of auctioning frequencies to individual operators and instead launching a tender for a single consortium to "implement and manage" the network. According to the country's Business Daily newspaper, the cellcos that are not part of that group will have the right to enter into MVNO deals. This could accelerate the progress of 4G roll-out - for mobile and fixed access - in Kenya by reducing the capex and opex burden on individual carriers.
"We are putting an advertisement of the 4G spectrum licensing either by the end of the week or early next week which is going to be done through public private partnership," commented Bitange Ndemo, Kenya's permanent secretary for information. "We are not going to give it to individual operators but a group, so they must work as a consortium." Spectrum will be provided as equity and suppliers will be expected to share build-out cost and risk.
Kenya has a chequered history of auctions, and the government has faced prolonged legal action from market leader Safaricom, which is part-owned by Vodafone. The operator paid US$25m for its 3G licence in 2007 but then sued the authorities when rivals Airtel and Telkom Kenya won their own 3G franchises for only $10m. Safaricom may also be the fly in the regulator's communal 4G plan, since it has already conducted advanced LTE tests in existing 3G spectrum and insiders say it will try to follow its own path in 4G.
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