Communication Authority to shut down 39 rogue courier operators

The Government has threatened to shut down more than three dozen firms it blacklisted for operating courier services across the country without paying regulatory fees.

Through the telecommunications industry regulator the Communication Authority, the 39 firms have also been accused of overstepping the provisions of their license agreements and will have their licenses revoked by the end of this week.

Some of the firms in the list include Nairobi-based food delivery company Dial-a-Delivery and parcel distributing service Easylink Courier.

“The license granted to the entities shall be revoked by the Communications Authority (CA) upon expiry of seven days from the date of this notice,” stated CA Director General Francis Wangusi in a notice dated April 22, 2016.

“The reason for the proposed revocation of licenses is non-payment of license fees and ceasing to engage in the business for which the license was granted,” Wangusi explained.

Targeted firms

Other firms that risk having their licenses revoked by the Friday deadline include Royal Courier Services, Transworld Courier, Rift Valley Luxury Commuter Shuttle and Western Parcel Express Courier.

The authority last month revealed that close to 90 per cent of courier operators in the country are unregistered denying the Government millions of shilling in revenue annually and posing a huge regulatory headache for the struggling postal sector.

According to industry numbers from the regulator for the second quarter of the 2015/2016 financial year, Kenya has a total of 2,117 courier operators in the private sector competing against the Postal Corporation of Kenya, which currently has 622 outlets.

While the sector saw revenues grow from Sh7 billion in 2013, to Sh8.5 billion recorded in 2014, unfair competition and price undercutting between providers has slowed down new investments into the sub-sector making it difficult for firms to improve their product offering or the development of their businesses.

In 2013 investments into the sector totalled Sh519 million but in 2014 this figure had reduced to Sh397 million.

CA is also hoping that revoking the licenses of the operators will also be an incentive for the remaining thousands courier operators that are waiting to be licensed, thus unlocking a huge revenue stream for the regulator.

According to the CA financial reports, the authority made Sh7.3 billion in income in the 2013/2014 financial year down from Sh8.7 billion made the year before with more than 73 per cent of this income coming from annual frequency fees, operating license fees, interest income and type approval fees.

Extending the regulatory net to the majority of unregistered courier operators will result in millions of shillings each year in additional revenue.