Safaricom faces 499m fine for blocking calls
News
By
Reuters
| Sep 04, 2018
The country’s biggest telecoms operator Safaricom faces a fine of around Sh499 million ($4.5 million) for failing to connect calls made to smaller firms, according to company and regulatory documents reviewed by Reuters.
The Communications Authority of Kenya (CA) has imposed a fine on Safaricom, part-owned by South Africa’s Vodacom and Britain’s Vodafone, of 0.2 per cent of its gross revenue for the last financial year, equivalent to Sh449 million), the documents show.
Safaricom denies the accusation and has secured a temporary suspension of the fine pending a hearing before an industry tribunal, according to the documents.
If upheld by the tribunal, the fine would be the largest ever imposed by Kenya’s telecoms regulator.
The fine marks an escalation of a row between the firm and the regulator over competition in the sector. The two parties have been tussling over a report on the industry, which among other things calls for price controls on Safaricom to help smaller operators.
READ MORE
Is government on 'fuliza' mode?
Expert: The shilling has regained value, but don't expect it to last
EAC Central Bank Governors meet in Juba as single currency race debate heats up
Ruto to push for global finance reforms at World Bank meeting
Unearthing the artifacts of WWII: A journey through Matuu and beyond
Roam, County Bus Service partner to deploy 200 electric buses
Budget cuts loom for Parliament thanks to Sh9.6b Bunge Towers
Private sector partnerships important to catalysing sports
Tax stand-off as boda boda riders defy county call to pay
Islamic banking gets traction in Africa as Salaam Bank feted
“The CA is trying to stamp its authority,” said Eric Musau, a research analyst at Standard Investment Bank.
“If this is the trend and there are other violations, it tells you the CA will be able to take tough decisions.”
The regulator said in a letter to Safaricom that it had received complaints from a rival, Elige Communications Ltd, that Safaricom was blocking calls to its network.
The regulator also said Safaricom, which controls 67 per cent of mobile phone subscribers in Kenya, had failed to follow the regulator’s directions as it tried to resolve the complaint.
“The Authority considers this an act of blatant disregard of not only other licensees’ rights but also the Authority’s directives and in contravention of license conditions,” the CA said in the letter, dated Aug 1.
In a letter of reply by Safaricom two days later, the company said it had complied with all directives from the regulator, and accused Elige of flouting its licence conditions by carrying international traffic instead of local calls.
“It is illegal to allow such international voice traffic to be terminated by a locally licensed operator into another network through the local interconnection link,” Safaricom wrote.
Elige Communications was not immediately available to comment on Monday.