Telkom Kenya has hit back at the communications regulator over plans to end the telco’s contract to manage the State-owned fibre-optic network, which earned the firm Sh250 million annually in fees.
The Communication Commission of Kenya (CCK) is seeking to end Telkom Kenya contract or new terms be offered to the operator.
The ICT ministry called industry players to discuss the matter tomorrow under National Broadband Strategy, prompting Telkom Kenya to hit back.
“The industry regulator does not have the mandate to determine who runs the operation of Nofbi and Teams,” Mickael Ghossein, the managing director of Telkom Kenya told the Business Daily on Friday.
The regulator says it has informed the ICT ministry of plans to license an independent operator to manage and control the inland nationwide network Nofbi or National Optic Fibre Backbone Infrastructure.
Teams is the undersea fibre optic cable that links Kenya to the rest of the world and is owned by the government (20 per cent) and operators including Safaricom, Telkom Kenya and Etisalat (UAE) and Wananchi Group.
The CCK says Telkom Kenya has not been aggressive in selling capacity to its rivals and that the Sh250 million management fees is on the higher side.
The move sets the stage for a fight following revelations that Telkom Kenya’s three-year contract to manage Nofbi was extended in March for another two years.
“There is need to establish new institutions or reform the existing ones to carry the mandate of managing the public ICT infrastructure such as Nofbi,” read part of the National Broadband Strategy report to be discussed on Tuesday.
France Telecom, owning 51 per cent stake, quietly negotiated a sweetheart deal with Kenya’s Treasury in 2010 that offered Telkom Kenya rights over assets built by the government after it demanded to be paid back a massive $325 million (Sh27 billion) on the grounds that some of the assets it had paid for could not be traced in the company’s register.
The assets included the State’s 20 per cent interest in cable company Teams Ltd and Nofbi, which was built by the government in 2007 at a cost of $60 million and covers nearly 5,000km to boost ICT penetration in remote zones.
Telkom Kenya said the Nofbi contract was officially signed in March and backdated to 2010, meaning it will come to a close in 2015.
It defended itself on selling capacity.
“Currently, four operators, including Telkom Kenya are using more than 3,000 km of the network, out of a total 4,500 km. In addition, the Kenya Education Network uses Nofbi to connect major universities in the country,” said Telkom Kenya.
