Telkom Kenya Protest Against New Mobile Licences issued to MVNOs.

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Orange Kenya, CEO Mickael Gossein. Image Courtesy commsmea.com

Telkom Kenya has protested against license issuance to three Mobile Virtual Network Operators in absence of contractual guidelines saying the act poses unfair competition to operators.

The telecommunications company also wrote to Communications Authority of Kenya (CAK) enquiring on the same. Without rules of engagement and parameters on hoe the acting mobile operators should do the new business, it has been difficult to strike deals with the parties that have shown interest in investing.

The licences offered have been issued under the Application service provider category to provide all forms of services to end-users using the communications infrastructure of a licensee under Tier according to Francis Wangusi, CAK director general.

CEO Telkom Kenya Mickael Ghossien said “The authority ought to consider the cost of investment put by the existing players and the possibility that MVNOs having not invested as much may engage in competitive practices that would lead to market dumping and lead to fresh price wars.”

He also emphasized on the vacuum this may cause resulting to inequitable distribution of the said partnerships and market concentration of the MVNOs in a single operator. The virtual Network Operators will offer all services; voice calls, data, mobile money transfer services and Short message services at a license fee of sh100,000 only, evidently posing serious competition against heavily invested telecom companies.

The three Mobile Virtual Network Operators licensed are Finserve Africa Ltd, a subsidiary of Equity Bank, Mobile Pay Ltd, owned by Tangaza Money and Zioncell Kenya. They will ride on existing operators’ networks at a negotiated fee, saving them the pain of heavy capital investment associated with rolling out telecommunication networks.

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Mr Wangusi said the authority is working on the policy guidelines and will release them before June.