Safaricom could get extra spectrum in government deal
18 May 2014, 10:34
Nairobi - Safaricom, Kenya's
largest telecoms operator, could gain vital additional spectrum
to help improve its services as a spin-off benefit from a
multi-million dollar government contract to build a security and
surveillance system, its chief executive said.
The firm, which is 40 percent owned by Britain's Vodafone
, needs additional spectrum to improve the quality of its
network and roll out fourth-generation (4G) broadband internet
services, also known as LTE.
"It will solve that but also it will likely allow us to
deploy LTE," CEO Bob Collymore told Reuters by phone,
after a newspaper report said the company had won a 12.3 billion
shillings ($140.7 million) contract to develop a communication
and surveillance system for the Kenyan police.
Safaricom's need for extra bandwidth was shown by its joint
bid with Bharti Airtel for the assets of Essar's Yu mobile in
April, a deal which would give Safaricom Yu's spectrum but which
has been put in doubt because it has not yet been fully cleared
Under the terms of the security contract, Safaricom will
spend about 12 billion shillings installing and running a
communication and surveillance system to help combat crime. The
deal will not affect Safaricom's guidance to the market for this
year, which was issued on Monday, the CEO said.
In Monday's statement, Safaricom said it expected free cash
flow to rise by between 10 and 17 percent in its financial year
through March 2015, driven by higher usage across its products
Safaricom shares were up 3.6 percent at 13.05 shillings by
1015 GMT. The stock has risen sharply through recent months and
hit a record 13.40 shillings in April, some four times its value
at the start of 2012.
Additional spectrum remains difficult for telecom operators
to come by in Kenya but Collymore said he expected to company to
win additional facilities under the contract that among other
things will virtually link up police stations.
"One option for government is to sell us some spectrum at
market value in order to defray some of the total cost," he
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