Many would compareKenya's recently declaredwholesalenetwork LTE planto Russia and question the actual possibilities of a cost reduction for the operators and the end consumers. Due to the monopoly the company has over the network, there might be a high chance that exorbitant prices would be charged to the operators who lease it. However, the difference between Kenya’s model and Russia’s lies in the fact that the Russian wholesale LTE network is largely controlled by Yota of which is allowed to control the prices at which the network is loaned. On the other hand in Kenya, the consortium was formed by the representatives from individual operators and is controlled by the government. Hence, the prices of the lease can be expected to be at reasonable levels.
Although much has been said, it should be noted that Safaricom is preparing to launch LTE services in Kenya and may be the only independent 4G services provider as it is unsure how the Kenyan Government is planning to deal with them. Also, the Kenyan government might face reluctance from companies to lead the charge due to the low returns it receives for the amount of work they have put in to organize the consortium. Furthermore, it will be hard for revenue and expenditure issues (which are also top priority issues) to be ironed out before the stipulated deadline.
PS: I am now experimenting on a"blog series" idea so as tohave amore focused blogging as well as create a platform for analysts and readersto discuss about certain topics. The first theme that I came up with is the "Emerging market" series where I cover a range of topics from emerging markets. But I need yourfeed back on what you think of this idea (or probably what themes you would like to see)to carry on with this expermiement.
Please forward your comments to Lim@abiresearch.com. Thank you