Alcatel, Nokia Siemens to invest in Kenya LTE network

31.07.2012
Nokia Siemens Networks (NSN) and Alcatel-Lucent will invest in Kenya's Long-Term Evolution (LTE) network in a move that could prove complicated for Chinese telecom companies Huawei and ZTE.

Alcatel and NSN are two of the nine companies selected by the Kenya government to be co-investers in the 4G network as part of a special public-private partnership commonly know as the 4G special purpose vehicle. The partners are: the four Kenyan mobile network operators, Telkom Kenya Orange, Airtel, Essar Yu and Safaricom; three tier-two network operators, MTN, KDN and Epesicom; equipment vendors Alcatel and NSN; and the government.

The network will operate on an "open access" model, where the shareholders will build the network, then lease it out to different companies and organizations.

"We waited for treasury to approve government of Kenya investment through spectrum (800Mhz) in the Special Purpose Vehicle, we have finalized on the nine partners and it's just a matter of time," said Bitange Ndemo, permanent secretary in the Ministry of Information and Communication, explaining why the process has taken time.

The process of selecting partners and actual rollout was complicated because some of the equipment vendors had not applied to be partners directly but were hoping to use existing relationships to help roll out the network. For example, Huawei has strong links with Safaricom and ZTE is strongly linked with Telkom Kenya Orange. But with Alcatel and NSN being part of the consortium but also competitors to ZTE and Huawei, it is not clear how the rollout will be subdivided.

It's not clear whether the equipment vendors will subdivide the regions or whether one vendor will be selected. In addition, Safaricom has the widest infrastructure coverage and it is not clear how infrastructure sharing will work.