Kenya to change telecoms shareholding rules

NAIROBI – Kenya plans to modify rules compelling foreign telecoms firms to take a 30 percent local shareholding, a move sparked by the country’s repeated failure to secure a second national operator.

A senior government official said on Friday the ministry of information and communications has suggested the government be allowed to hold on to the 30 per cent shareholding until a foreign investor finds local partners. The proposal – subject to cabinet approval – also seeks to allow a foreign investor to start operations while seeking Kenyan investors, ministry of information permanent secretary Bitange Ndemo said.”We got stuck in this second national operator thing, and we are trying to do everything possible,” Ndemo told reporters after addressing a regional telecoms conference.”(One option) that we may be looking at is to warehouse the 30 per cent for at least one year, meaning the government holds on to it while they are looking for local partners,” he added.Industry analysts say the tendering process for the licences does not give foreign companies time to check the credit-worthiness of local investors.The government first invited bids for a second national operator licence in 2003 but cancelled it the following year, drawing criticism that it was not serious about industry reform.Nampa-ReutersThe proposal – subject to cabinet approval – also seeks to allow a foreign investor to start operations while seeking Kenyan investors, ministry of information permanent secretary Bitange Ndemo said.”We got stuck in this second national operator thing, and we are trying to do everything possible,” Ndemo told reporters after addressing a regional telecoms conference.”(One option) that we may be looking at is to warehouse the 30 per cent for at least one year, meaning the government holds on to it while they are looking for local partners,” he added.Industry analysts say the tendering process for the licences does not give foreign companies time to check the credit-worthiness of local investors.The government first invited bids for a second national operator licence in 2003 but cancelled it the following year, drawing criticism that it was not serious about industry reform.Nampa-Reuters