Communications Authority of Kenya renews Safaricom licence for ten years

Safaricom CEO Bob Collymore.

Nairobi, Kenya: The Communications Authority of Kenya (CAK) has renewed Safaricom’s operating licence for ten years. The firm paid a Sh2.3 billion renewal fee.

This ends a tussle between the two on the renewal of the firm’s licence that has gone on for months. At some point, the regulator had threatened not to renew Safaricom’s licence upon expiry of the licence this month due to poor service delivery.

The Authority has had issues with Safaricom’s Quality of Service (QOS), where the firm has performed dismally in the QOS tests undertaken by the regulator. CAK had warned Safaricom that it would not renew the licence, if it failed to improve on its QOS.

Tough conditions

Safaricom was issued with its first 15-year licence in 1999. CAK said yesterday it had renewed Safaricom’s licence and that the firm had already made the payment. It, however, did not explain the decision, including whether the firm had met the set conditions.

The regulator presented the Sh2.3 billion cheque to President Uhuru Kenyatta for onward transmission to Treasury yesterday at a rebranding event where the regulator changed its name to Communications Authority of Kenya (CAK) from Communications Commission of Kenya (CCK) in line with the Constitution.

“We are happy to announce that one of our players in the market has successfully applied for the renewal of their licence to continue operating in the country in the next ten years. They have paid their initial fee of $27 million (Sh2.4 billion),” said CAK Director General Francis Wangusi

All operators, save for Essar Telecom, operating as yuMobile, paid $55 million (Sh4.8 billion) for their GSM licences for 15 years. Essar Telecom paid a reduced $27 million (Sh2.4 billion). Last year, the telecoms industry regulator said it would, going forward, charge a uniform renewal fee of $27million for all GSM Mobile Operator licences.

Safaricom has in the past conceded that the quality of its services is not the best, which it has attributed to scarce spectrum and a huge customer base. It has in the recent past embarked on upping the quality of services offered. Last year, it embarked on an upgrade that would transform the network to be among the best in the country.

The firm has in the past argued that the licence fee is high, which divert resources from telcos eroding the industry’s capacity to offer quality service.

During rebranding event held at Authority’s offices in Nairobi, Chairman Ben Gituku also presented a Sh4.095 billion cheque to the head of State, which was the surplus from the Authority. The regulator usually collects fees from operators, retains some to cater for its operations and forwards the rest to Treasury.

President Kenyatta said the Government is keen on employing ICT to grow the economy, noting its contribution to the economy was laudable.