News, views and commentary from the telecoms sector across emerging markets and developing countries worldwide

Sunday, 12 April 2009

Kenya: Zain and Yu cut costs through infrastructure sharing

Having very recently been to Kenya for the first time, I now find stories from that country catching my eye.

One which has broken since my trip, reported by Telegeography among others, concerns a network infrastructure sharing deal struck by Zain Kenya and Essar Telecom Kenya (until recently known as Econet Wireless Kenya).

In February, I asked here
whether 2009 will see arrangements of this type having a major impact in emerging markets worldwide. I cited recent examples from India, Bangladesh and Panama, but noted that in Zambia, Zain had declined to become involved in a network sharing project recommended by that country's telecoms regulator in order to boost rural coverage. Zain Zambia and prospective network sharing partner MTN Zambia preferred to spurn the approach from the regulatory agency on the grounds of guaranteed quality of service being a difficult issue.

Zain's Kenyan operation appears to have no such qualms, with reduced base station operating costs being cited in local reports as the principal driver for the cellco entering the infrastructure sharing deal with the Yu-branded recent entrant.

This presumably meets with the approval of the Communications Commission of Kenya, whose Assistant Director Susan Mochache spoke at the East Africa Com conference I recently attended. Ms. Mochache's presentation made mention of infrastructure sharing as a plank of the Commission's wider strategy of promoting competition. Ms. Mochache was asked during the conference about whether network sharing was something the Commission would be merely recommending or whether it might do some degree become mandatory. The answer, however, was not immediately clear to me. I think I understood that this is an issue which is still under discussion.

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