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Wangusi heads for exit amid raging battle for ICT billions

By Frankline Sunday | June 2nd 2019
By Frankline Sunday | June 2nd 2019
Francis Wangusi. His tenure dominated by internal wrangles and court cases. [File, Standard]

Kenya’s information and communications regulator is once again facing a leadership crisis as powerful State officials seek control of the institution’s multi-billion-shilling budget.

For the second time in as many years, Communication Authority of Kenya’s (CA) top leadership is in limbo as a legal dispute exposes a plan to clip the independence of the influential regulator and place it under the control of individuals in government.

Last week, CA board chairman Ngene Gituku put out a statement declaring the post of director-general vacant in a bid to kick-start the replacement of Francis Wangusi, whose term expires in August this year.

However, stakeholders in the telecommunication sector have faulted the authority for flouting due process by seeking to replace Mr Wangusi while a legal dispute on the CA’s leadership is currently in court.

“We are surprised the authority has begun the process of recruiting a new director-general while the board of directors remains in office illegally,” said Stephen Mutoro, the chief executive of the Consumers Federation of Kenya (Cofek). 

Last month, the High Court blocked the appointment of a new board following a suit by activist Okiya Omtata challenging the appointment process.

In the case that will be heard on Tuesday, Mr Omtata argues that the appointment process for the authority’s board of directors and director-general has been undermined by recent amendments to the Kenya Information and Communications Act (KICA).

The Miscellaneous Amendments Bill, 2018 expunged clauses to the KICA Act, 2013 that mandated the authority to replace the board chairman and director-general through a selection panel.

The panel was constituted by several representatives, including the Media Council of Kenya, Kenya Private Sector Alliance, Law Society of Kenya, Institute of Engineers of Kenya and Cofek, and instead conferred the appointing authority to the Cabinet secretary in charge of the ministry.

Dilute independence

This has raised concerns that the independence of the authority will be diluted if the Cabinet secretary chooses to handpick their preferred board members without any oversight.

Wangusi’s impending exit has been as acrimonious as his tenure, as the authority’s second director-general and highlighted the perennial leadership wrangles that have dogged the regulator since inception.

He assumed office in 2012 after the High Court nullified the re-appointment of his predecessor, Charles Njoroge, by then ICT minister Samuel Poghisio.

Then known as the Communications Commission of Kenya, the regulator was coming out of vicious boardroom wrangles that were partly quelled by Wangusi’s appointment.

The previous board had been dissolved following allegations of corruption in its decision to award the third mobile subscriber licence to Econet Wireless, which later became Essar Communications, operators of the Yu network after a 2009 acquisition.

Five years later, when Safaricom and Airtel Kenya signed an agreement to acquire YuMobile for Sh10 billion, the CA top management once again stood accused of abusing their mandate and causing the taxpayer losses by waiving billions of shillings in licence fees.

In the deal, Airtel was supposed to absorb the 2.7 million YuMobile subscribers at a cost of $6.9 million (Sh710million) while Safaricom took up the frequency and phone masts.

According to Airtel, CA had promised to merge its operating licence with that of the defunct YuMobile, with the deal granting Airtel a lease to operate in the country until January 2025. A few months later, however, the CA wrote to Airtel demanding the telco pay up Sh2.3 billion to renew its operating spectrum licence.

CA said the National Treasury had insisted on the payment since licence fees are a matter of public revenue and only Treasury can grant waivers.

Airtel went to court in 2015 and CA lost the case. The issue caused a rift in the regulator’s boardroom, with the highlight being an acrimonious meeting in 2016 that ended with the arrest of some board members.

At the heart of the perennial disputes dogging the authority are the billions of shillings collected each year in licence fees for telecommunication service providers and broadcasting companies operating in Kenya.

Tier 1 network service providers such as Safaricom, Airtel Kenya and Telkom Kenya pay Sh15 million for an initial operating licence, as well as an annual operating fee of 0.4 per cent of their gross turnover or Sh4 million, whichever is higher.

This is besides the billions in spectrum fees the companies pay to utilise the finite radio communication pathways the regulator assigns to service providers to channel their networks.

Spectrum fees have predictably been the major cause of rifts in the authority’s boardroom.

In 2017, months after the acrimonious board meeting that later saw some board members sent packing, Mr Gituku was hard-pressed to explain why the authority had granted Jamii Telecom a 4G mobile licence without the company paying the Sh2.5 billion spectrum fee levied on other providers.

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