The telecommunication industry in Kenya has experienced massive growth in the recent past. Since 2013, there has been continuous growth in the number of subscribers, with mobile penetration reaching 88.7%, digital broadcasting rising to 78% and mobile money penetration hitting 61.83 in the 2016/2017 financial year.
The growth has been propelled by increased competition, improved national and international connectivity, and rapid developments in the mobile market and the internet market. In the wake of increased competition, there has been notable large-scale infrastructure development undertaken by the various telecommunication providers aimed at increasing their network and signal coverage.
To expand the network and signal coverage, the telecommunication providers in the mobile, voice, broadcast and internet service ordinary have had to share their existing infrastructure in what is commonly referred to as infrastructure sharing.
Infrastructure sharing can either be passive or active. Passive sharing refers to the sharing of physical infrastructure or the sharing of non-electronic infrastructure at cell sites such as base transceiver station shelters, generators, ducts, batteries and utility poles among others. Active sharing, on the other hand, involves the sharing of electronic infrastructure such as frequency spectrum, radio access network and other intangible assets that contribute to transmission and reception of network and signals.
Huge capital investment and operational expenditure involved in setting up a telecommunication infrastructure have made it difficult for small players in the industry to access market and locations where they have not ventured into. Sharing of infrastructure has thus allowed these small firms to lower costs and increase the coverage and access to services.
The legal framework for infrastructure sharing is provided in the Kenya Information and Communication Act, Cap 411A (as amended in 2015) (‘’KICA’’). Part VIC of KICA aims at promoting fair competition in the provision of telecommunication services by the telecommunication operators. More specifically, section 85A (3) allows the Communications Authority to make regulations that allow for infrastructure sharing. Regulations pursuant to this section have not been made by the Cabinet Secretary responsible for matters related to ICT.
However, other regulations provide for infrastructure sharing. The Kenya Information and Communications (Interconnection and Provision of Fixed Links, Access and Facilities) Regulations, 2010 has been enacted pursuant to Section 84W of KICA.
The Regulations allow for both active and passive infrastructure where it allows telecommunications operators to avail services or facilities to other operators to allow them provide their services. Co-location, a type of passive sharing, allows operators to accommodate other operators switches and other communication equipment with a view to providing telecommunication services.
The Kenya Information and Communications (Fair Competition and Equality of Treatment) Regulations, 2010 sets a regulatory framework for promotion of fair competition and equal treatment in the telecommunication sector and to protect against the abuse of market power or other anti-competitive practices within the communications sector.
In the Regulations, where an operator is declared dominant, the operator shall be required to meet all reasonable requests for access to its telecommunications network by other operators. This can be interpreted as a means of forcing infrastructure sharing when an operator becomes dominant so as to allow for fair competition.
The entry of Mobile Virtual Network Operators (MVNOs) and Independent tower companies best exemplify infrastructure sharing in telecommunications industry in Kenya.
MVNOs do not own their own network infrastructure but they override on the infrastructure of existing Mobile Network Operators (MNOs). In brief, they rely on both the passive and active infrastructure of established operators. However, they operate independently from the MNOs. Examples of MVNOs in Kenya include Equitel operated by Finserve Africa Limited, a subsidiary of Equity Group Holdings, which is hosted by Airtel Kenya Limited.
Independent tower companies such as Eaton Towers demonstrate the application of passive infrastructure. They own and manage the towers that allow for mobile and wireless communication while the telecommunications operator owns and operates the antennae equipment, shelter and cables. An independent tower company can lease its tower to several operators.
The Universal Service Fund, established by Section 84J of KICA, main purpose is to encourage efficient access to and use of communications systems and services throughout the Republic of Kenya. In a bid to ensure that this happens, the telecommunications operators are required to apply for subsidies for setting up telecommunication masts in marginalized areas and evidently infrastructure sharing should be mandatory to areas that have poor network connectivity.
The advantages of infrastructure sharing include ICT penetration of small players into areas where they have been unable to venture into, especially the rural and marginalized areas. The other advantage is that the hosting ICT operators can generate revenue from the operators being hosted. It also allows the operators to reduce capex and opex when seeking to expand to new areas.
The challenges with site sharing include the unwillingness of some of the operators to share their infrastructure. However, this can be resolved by the Communications Authority as provided under Section 85A of KICA.
In conclusion, infrastructure sharing is important as it enables telecommunications operators increase network and signal coverage to benefit consumers of their services. However, the regulatory bodies should come up with clear guidelines that provide for effective sharing that minimise on disputes between the operators.
1Communications Authority, Annual Report for Financial Year 2016/2017 available at http://www.ca.go.ke/images//downloads/PUBLICATIONS/ANNUALREPORTS/Annual%...
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