Kuwait Oil Company delays telecommunications tender

21 December 2010

Ministry refuses to provide national oil company with frequencies

Kuwait Oil Company (KOC) has had to delay its tender for a worldwide interoperability for microwave access (Wimax) network since the Communications Ministry has refused it the necessary frequencies. KOC’s current frequencies are incompatible with Wimax.  

The tender was due to close in October, but has been postponed until 30 January 2011. KOC is hoping to acquire the frequencies before then or find another solution, which will be difficult. If the ministry refuses it the frequencies, the tender is likely to be dropped.

The tender is for the supply and installation of Wimax services intended to increase network coverage for its oil fields. It is estimated to be worth KD8m ($28.5m). Equipment vendors will have to partner with local companies. US-based Motorola, China’s Huawei, South Korea’s Samsung and Canada’s Redline submitted a bid for the original tender. Sixteen local partners are involved including Tarasul Telecom, Hyatt Communications, Computer Data Networks, Future Telecommunications Company and Kharafi National.

A possible solution is the manufacturer produces specific equipment suited to the current frequencies, but this will defeat the purpose of Wimax as KOC will be bound to buy the equipment from the specific manufacturer. The issue has left KOC in a dilemma. It has already altered the tender to include companies that can provide their own frequencies.

One of the bidders accuses the ministry of favouring the mobile sector over internet service providers (ISPs). “They need to deregulate the industry. Wireless licences expire every six months here and the ministry has frozen issuing any new internet licences. Problems will not be solved until they deregulate,” says the bidder.

Kuwait is the only country in the Middle East without a regulator. The government has consulted British Telecom to help establish a regulatory body, expected for some time in 2011, although this has not been confirmed. 

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