Ten companies have launched a proposition for the fourth-generation network (4G), which if approved will usher in high-speed internet provision for mobile users.
According to the Communications Authority of Kenya (CA), the applicants are part of two different consortiums made up of five companies each, and their applications, which were submitted in December 2017 are still being evaluated.
The two consortiums want a share of the free 700MHz frequency band left during the TV digital migration. The bandwidth can be used to avail 4G network to many mobile users across the country.
“Towards the end of 2017, the board made a decision, which was to have the tier companies form consortiums. The consortiums would then be given a spectrum and a trial for a year under which if they became successful, they would pay a spectrum fee,” said Francis Wangusi, the CA director-general.
Jamii Telecom was assigned part of the three 700MHz frequency band in 2017 leaving two blocks up for grabs. This is the reason why the CA decided to go with the consortium model as the remaining band wouldn’t be sufficient to go around.
Bids for other two-tier companies that had made individual applications were set aside by the CA. The spectrum was also closed by the regulator to larger operators Safaricom, Airtel and Telkom Kenya.
The names of the applicant companies for the new spectrum were not given by the CA but according to their data, tier two electronic service providers consist of Liquid Telecom, Wananchi Group, iWay Africa, and Access Kenya Group. However, there is no definite clarity on whether they are part of the consortiums or not.
There are two options for the consortium members to choose. The first option a joint investment in a special purpose provider that will run the network instead, whereby the individual companies will hook their customers to the network.
They can also decide that one of the members be issued the spectrum. The designated company will then roll out the network and lease it at agreed prices.
While this move is bound to disrupt and make the market competitive, there are some quibbles. There is a shortage of mobile devices that support the 4G bandwidth. This is a challenge that has also been mentioned by Jamii Telecom, which launched its Faiba 4G service last year.
There is also need for massive investment in infrastructure if the service providers are to penetrate beyond urban areas. Similarly, they also lack the spectrum to serve customers still using 2G and 3G networks.
According to the CA, there are plans to allocate additional bands of spectrum to the tier two operators in the future. Also, it is encouraging the sharing of infrastructure.