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The East African : Apr 13th 2015
The EastAfrican NEWS APRIL 11-17,2015 4G ROLLOUT Safaricom gets headstart in scramble for frequencies Expe≥ts say if the t≥ials ≥eflect what will happen in the comme≥cialisation stage, the g≥ound fo≥ 4G ≥ollout is tilted in favou≥ of the ma≥ket leade≥ “Some countries simply auction the spectrum.” Meoli Kashorda, Kenya Education Network Although the two ranges of 800 MHz and 1800 MHz remain the most attractive LTE (Long-Term Evolution) spectrum due to the large number of devices that subscribers can use, the 800 MHz offers better indoors coverage. The rising population and buildings in urban areas are posing a barrier to effective communication, with operators seeking to deploy the most efficient band to match the challenge. “The 800 MHz LTE is the best network spectrum and it needs to be shared to ensure one party does not get the benefit of the fast mover advantage,” said Airtel’s letter. Experts say if the trials re- By SCOLA KAMAU Special Correspondent K enya’s communications regulator is on the spot over claims of bias in the allocation of frequencies for trials of faster data transmission to the country’s biggest telcos, Safaricom and Airtel. Allocation of the Fourth Generation (4G) spectrum on a full-time basis is expected to be hotly contested later this year with each telco looking to get an edge in offering value-added products at faster speeds through the technology. Kenya is the second coun- try in East Africa to pilot 4G, after Rwanda, which launched it last year. The rollout is expected to foster faster Internet speeds. But industry players have already started raising eyebrows after the Communications Authority gave Safaricom stronger frequency for trials of the 4G service than its rivals. The 1800 MHz range allo- cated to Airtel is expensive to maintain because it requires installation of more base stations to transmit the same quality as the 800 MHz at Safaricom’s disposal. A new base station would cost Ksh15 million ($163,000), regardless of the frequency type. 4G is set for commercialisation early next month. Safaricom’s rivals fear that it will get a fast-mover advantage by offering better quality at minimal cost to its customers. This would entrench the company’s leading position in the market. “The provision of the 800 MHz band tips the scales in favour of the dominant player in the market — Safaricom,” said Vincent Lobry, chief ex- ecutive of Orange Telkom (Kenya) in an e-mail to The EastAfrican. “The industry seeks to know which mechanism the regulator will use to allocate these frequencies to other players in the market.” Correspondence seen by The EastAfrican shows the terms of trials between Safaricom and Airtel differ. Safaricom was issued with a trial LTE/4G licence on February 9, 2015 in the 800 MHz band for a period of three months pending licence issuance while Airtel was issued with a licence on February 10 in the 1800 MHz band for a period of 12 months “after which the Authority will review and make a decision on whether to issue a full licence.” Orange Telkom Kenya al- ready has a technology-neutral licence, which allows it to launch any telecommunication services, including 4G, but it has to acquire the bandwidth and capacity com- FREE FREQUENCIES On February 14, the analog frequencies between 700MHz and 800MHz were freed up from the broadcasters as they migrated to the digital platform. The CA had indicated that telcos would be allocated the freed frequencies but it is yet to issue guidelines for the allocation. The 800 MHz frequency band is a portion of the electromagnetic spectrum that is used for analogue television broadcasting before changing to digital terrestrial television. It enables fast movement of data at a speed of up to 100Mbs while reducing interference. patible with the technology. Sources said there could be a plan to allocate Safaricom the biggest chunk of the 700800 MHz band following an agreement with the Ministry of Interior and Co-ordination of National Government that will see Safaricom roll out a national surveillance, communication and control system for Nairobi and Mombasa. Trial stage The original plan for the 4G rollout was to allocate the spectrum to a consortium of operators and equipment suppliers rather than to one operator, but this seems not to have worked as the telcos have to apply for the allocation in a trial stage, after which the CA determines whether they are qualified for commercialisation. In a letter to the CA, Airtel proposed the multi-operator core network (MOCN) approach, where each network operator has its own core network from a shared infrastructure. If there are existing base stations for the 4G network deployment, they should be shared depending on the terms of agreement between the two operators. “We propose that com- mercial launch be allowed to sharing operator after three months of completing sharing agreement,” said Airtel in the letter, which has been seen by The EastAfrican. This means that if Airtel were to be allowed to share the 800MHz band with Safaricom, after three months Airtel would get its own allocation without going through an individual trial phase. According to Safaricom officials, the spectrum allo- cation formula should be revised from time to time to reflect the changes in each player’s subscriber base, among other factors. “Operators who show a more efficient usage of frequency spectrum per cus- tomer should be given access to more spectrum or greater spectrum payment concessions to encourage efficient use of the scarce resource,” said Nzioka Waita, Safaricom’s corporate affairs director. flect what will be allocated in the commercialisation stage, the ground for the 4G rollout is already tilted in favour of Safaricom. “It could cost Airtel up to four times to roll out infrastructure for the same coverage,” said Meoli Kashorda, executive director of the Kenya Education Network. 5 PRESS STATEMENT Clarification on media reports linking Britam Kenya to Bramer Bank Corporation and BAI Company (Mtius) Ltd. There has been enquiries on the relationship between British-American Investments Company (Kenya) Limited (Britam Kenya), Bramer Bank Corporation and BAI Company (Mtius) limited following the action of the Bank of Mauritius to revoke the banking license of Bramer Bank Corporation and the subsequent appointment of PwC by the Financial Services Commission as conservator to protect the interest of policy holders of BAI Company (Mtius) Limited. British-American Investments Company (Kenya) Limited (Britam) wishes to inform its investors, customers and the general public that: • Britam (Kenya) is an independent legal entity separate from Bramer Bank Corporation and BAI Company (Mtius) Ltd (BAI). • Britam is a diversified financial services group listed in the Nairobi Securities Exchange with over 25,000 shareholders. One of Britam’s shareholders, British-American (Kenya) Holdings Limited that holds 23.34% stake, is related to BAI. • Bramer Bank Corporation is not a shareholder of Britam (Kenya). • There are common directorships between Britam, BAI and Bramer Bank Corporation. However, Britam is managed through an independent board of directors and management • There is no other relationship between Britam (Kenya) and BAI or Bramer Bank Corporation. In this regard, we wish to reassure our investors, customers and the general public that there is no exposure to Britam in relation to the recent developments in Bramer Bank and BAI in Mauritius. Mr. Muthoga Ngera Director, Marketing & Corporate Affairs Mrs. Nancy K. Kiruki Company Secretary British-American Investments Company (Kenya) Limited (Britam) For more information please contact: Muthoga Ngera, Director, Marketing and Corporate Affairs on email firstname.lastname@example.org or visit http://www.britam.co.ke.
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