Corporate

Top three mobile operators to pay Sh2.5bn each for 4G licence

Francis Wangusi, the CA director-general. PHOTO | FILE
Francis Wangusi, the CA director-general. PHOTO | FILE 

Safaricom, Airtel and Telkom Kenya will pay Sh2.5 billion each for the 4G spectrum licence fee that the Communications Authority of Kenya (CA) has said it will start issuing next month upon payment of the fees.

Francis Wangusi, the CA director-general, told the Business Daily that the technical committee has approved the issuance of the licence but the management is still waiting for the final go-ahead from the board.

Besides paying the licence fees, the three mobile operators will also be required to share at least 30 per cent of the 4G frequency spectrum with smaller telcos once allocated licences for commercial rollout of the technology.

Safaricom and Airtel were last year issued with 4G frequency spectrum on a pilot basis while Telkom Kenya’s new shareholders Helios Investment Partners last week said they will be applying for the licence in the coming weeks.

“The technical committee has met and approved, final approval awaiting next full board meeting probably in early July 2016,” Mr Wangusi said in response to Business Daily queries.

“The telocs will each pay $25 million (Sh2.5 billion) for the licence fee.”

The frequencies issued to Safaricom and Airtel for pilot purposes limited the geographical area they could rollout the services.

The drive by the mobile operators to rollout the high speed Internet service is propelled by the need to tighten their grip on the data market segment which together with mobile money payment services is seen offering future growth opportunity.

Mr Wangusi said the move to compel the operators to share 30 per cent of the spectrum  is aimed at giving smaller operators such as mobile virtual network operators (MVNOs) and tier-two infrastructure providers such as Liquid Telecoms, Jamii and Wananchi Group access to the limited resource at a lower fee.

The 4G frequencies enable the telcos to offer high speed Internet to mobile phone customers as well as broadband-based TV broadcasts.

CA had earlier said Safaricom, Airtel and Telkom will be allocated equal share of the preferred 800MHz frequencies.

The 800 MHz band, according to Airtel, enables an operator to roll out 4G services at a lower cost because it provides good network coverage with fewer radio infrastructure (radio base stations ) than the 1800 MHz, the other broadband spectrum.

The allocation of the frequency was made possible following a resolution arrived at the Geneva Radio World Conference in mid-December 2015 where African countries agreed to allocate mobile telecommunication firms additional frequencies freed-up after migration from analogue to digital TV broadcast.