Telkom Kenya Says it Plans to Deploy 3G Network in Fourth Quarter of 2010

Telkom Kenya, a unit of France Telecom SA, said it plans to set up a third-generation network in the east African nation by the end of the year, after the industry regulator lowered the cost of 3G operator licenses.

The Communications Commission of Kenya announced this month it had cut the price of a 3G permit by 60 percent to $10 million to boost competition.

“We wanted the fee to go down to $3 million and on the higher side $10 million,” Angela Mumo, the company’s head of corporate communications, said by phone from the capital Nairobi today. “Now we can confirm we are taking out a 3G license. We will roll out 3G in quarter four.”

Telkom Kenya is running a 3G pilot program it began in December in about 10 locations for corporate customers, Mumo said, adding that the new network will enable subscribers to get quicker wireless Internet, voice and data services.

Safaricom Ltd. holds the only 3G permit in Kenya and the company plans to seek a partial refund for the $25 million it spent in 2007 to acquire it, the Business Daily reported on June 11, citing Chief Executive Officer Michael Joseph.

Safaricom, East Africa’s biggest mobile-network operator, and Telkom Kenya compete with Zain Kenya Ltd., a unit of Bharti Airtel of India, and Essar Telecom Kenya Ltd., a unit of India’s Essar Group.

Zain is at a “very advanced stage” of deploying a 3G network and welcomes the licensing fee cut, Managing Director Rene Meza said on June 18.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net.

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