VTEL, which has partnerships with local companies and a technical partnership with Palestinian PalTel, now has a license to provide fixed-telephony, mobile service, Internet and data services.

John Waweru, the director general at the Communications Commission of Kenya (CCK) said, "We at the commission are happy that the Kenyan communications market is still very attractive to investors. We have witnessed very serious bids in this license."

VTEL bid US$ 169.7 million, winning out against India's MTNL and Reliance Consortium, which included Swedtel of Sweden. MTNL bid US$ 52.1 million while Reliance bid US$ 111 million. The three contenders remained in the race out of 13 groups that expressed interest when CCK invited bids in May.

CCK said it would publish its intention to give VTEL the license and then allow two months for any party to bring objections before the license is granted by late January. The winner is expected to start operating within a year. VTEL said it hoped to quickly roll out next generation network in Kenya, moving on both fixed-line and mobile business.

"Our strategy is convergence. Mobile alone eventually will not survive, fix (fixed line) alone will not survive. We need to put them together," Nour Atout, VTEL's CEO for Africa said.

Atout added that Kenya would be one of VTEL's first operations in Africa but that company is targeting two or three other countries.

"We were not looking for money, what we want is better services. This was just a beauty contest in terms of who can pay better," Waweru said when asked whether he was happy with the winning bid.

In the mobile business, VTEL will compete with leading mobile provider Safaricom and Celtel. The highly profitable Safaricom is owned jointly by Vodafone and Telkom Kenya. The third licensed mobile provider, Econet Wireless, is yet to start operations.

Source: Reuters - WDR/Intelecon Regulatory News