The Kenyan government has announced plans to scrap a law which had required foreign firms to have local partners if investing in the telecoms industry. Under the current system, any investor has to allocate at least twenty percent of the company to a local partner, which has caused legal problems in the past.
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"This rule is messing us up in terms of investments. There are large companies which want to invest in this country without partnering with other individuals," Bitange Ndemo, permanent secretary at the Information Ministry, told the Reuters news agency in an interview.
"We must do everything to bring more foreign direct investment to this country," he told Reuters. He did not give a date when the change would come into effect.
One of the country's mobile license holders, Econet Wireless was mired in legal action from minority shareholders which completely derailed its network launch for around two years. The company later sold a large stake to India's Essar Communications Holdings to raise the necessary funding for its network rollout. The company is expected to finally launch early later this year.
The Kenyan market is dominated by Safaricom, which has a market share of 86.6% - followed by Zain and Orange. According to figures from the Mobile World, the country had 36.5 million mobile phone subscribers at the end of the first half of this year - although that still represents a population penetration level of just 39%, leaving plenty of space for a third network to enter the market.
Source: Cellular News.