Ten companies applied for 4G spectrum licenses in Kenya, with the intention of using them to offer high-speed internet and mobile phone services, Business Daily reported.

The Communications Authority of Kenya (CA) said the applications by interested parties, which are comprised of two consortiums of five companies each, were submitted in December 2017 and are still under evaluation. The consortiums are seeking spectrum in the 700MHz frequency band which can be used for 4G and was freed up when Kenya migrated to digital television.

CA director general Francis Wangusi said the regulator’s board made a decision to have two consortiums and give them spectrum on trial for one year: “Then if they are successful, they pay the $25 million (spectrum fee),” he stated.

Wangusi explained this was done because there is limited spectrum and “if we were to give to one, then the others might cry foul”.

Tier-two targets

The 700MHz spectrum band is divided into three blocks, one of which was assigned to Jamii Telecom in 2017, leaving two blocks remaining. The bid is closed off to the country’s top operators – Safaricom, Airtel and Telkom Kenya – as they already have spectrum in the 800MHz band which they are using for 4G.

While the ten interested companies have not been named, CA lists Wananchi Group, Liquid Telecom, iWay Africa, and AccessKenya Group among the tier two providers. The Unified Licensing Framework allows such companies to provide mobile services, but they have yet to be allocated the necessary spectrum.

Consortium members can choose to either have the spectrum issued to one of the five members, or jointly invest in a special purpose vehicle which will run the network on their behalf, Business Daily explained.

In the case of the former the chosen member would roll out the network and lease it out to the rest of the consortium.

Challenges the consortiums are likely to face include the lack of a variety of cheap devices compatible with the 700MHz band, the newspaper reported. Jamii Telecom, which launched 4G services in 2017, is facing this issue. The need to invest massively in infrastructure and the inability to serve customers whose devices are still on 2G or 3G could also prove to be hurdles.

The CA said there are plans to allocate additional bands of spectrum to tier two operators in the future and it wants to encourage infrastructure sharing.