Reliance Communications loses Kenya phone licence

Mumbai: Indian mobile operator Reliance Communications Ltd lost its chance to become the second national operator (SNO) in Kenya as it failed to apply for the licence by the March 15 deadline.

"The CCK Board today withdrew the licence award to Reliance, and resolved to immediately initiate the SNO tender process afresh," a statement issued by the Communications Commission of Kenya said.

Reliance too had bagged the award after the winner Vtel consortium failed to apply for the licence within the deadline — which was January 24.

The Commission then cancelled the tender award and invited Reliance, the second highest bidder, to apply for the licence in line with the provisions of the tender document.

Reliance Communications accepted to take up the offer and was subsequently granted more time to comply with the various formalities in preparation for making the licence application.

The offer was subject to Reliance matching Vtel''s bid price of $169 million.

The government is expecting Vtel of Dubai, who had offered to pay $169 million for the licence, still wanting to invest in Kenya.

Kenya has been trying unsuccessfully to auction the SNO licence since 2003. While the first successful bidder, Vtel Ltd, failed to apply for a licence in time following disagreements with its local partners, the second highest bidder, Reliance Communications, too failed to apply for it.

Reliance Communications is reported to have made demands to the Kenyan government that were way beyond the conditions of the tender — duties, relaxation of rules for listing of its local subsidiaries on the Nairobi Stock Exchange, and a commitment to share infrastructure from existing mobile companies.

Following this, the board of the Communications Commission of Kenya is believed to have decided to formally announce the cancellation of negotiations with Indians and to tender afresh.