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MPs summon Safaricom and CA chief over M-Pesa outage

Business

Parliament has summoned the management of Safaricom and the country’s new communications regulator, David Mugonyi, after fresh M-Pesa outages left customers of Kenya’s biggest telco without services for hours twice in as many weeks.

The chairperson of the Departmental Committee on Communication, Information and Innovation John Kiarie told The Standard yesterday that Safaricom’s management and the Communications Authority of Kenya (CA) are expected to shed light on the successive outages, which have rocked businesses and inconvenienced customers.

“Yes, (we have summoned them),” said Mr Kiarie ahead of the meeting.

Safaricom’s mobile money platform M-Pesa was hit with a downtime on Monday, inconveniencing millions of customers who rely on it for payment transactions.

M-Pesa accounts for about 99.9 per cent of the value of mobile money transactions, underlining the entrenchment of the platform in the economy.

M-Pesa is seen as a de facto national payment system, which makes it a critical part of the economy.

Monday's M-Pesa disruption was the latest in a series of glitches, with the service suffering an outage for several hours earlier this month and August last year that paralysed bank-to-M-Pesa transfers.

The latest outage saw millions of Kenyans who rely on M-Pesa for their financial transactions such as paying for utilities like electricity, fuel and parking fees or purchasing items such as food and medicine in supermarkets and chemists stranded with unpaid bills.

The possibility of telecommunications service outages has in the past been viewed by government experts as a threat to the economy, especially for critical services such as money transfers.

A 2016 Treasury report and subsequent Treasury reports have often warned that a collapse of the M-Pesa service could, for instance, cause widespread disruption in the economy.

This means M-Pesa is classified as a systemic risk to the country's economy, underlining its crucial role.

Safaricom said in a public notice the outage had been fully resolved as of Tuesday.

Safaricom apologised to its users Tuesday after restoring its services.

“We experienced service intermittency with PayBill payments that resulted in some transactions not being completed on M-Pesa,” said Safaricom in a notice to customers.

“The technical issue has since been resolved, and we continue to monitor the services closely. We apologise for any inconvenience that this disruption may have caused.”

The communications regulator, CA, is permitted by law to sanction any telecommunications company that inconveniences customers through service interruptions as a result of omission on its part.

The Standard reached out to CA's new boss David Mugonyi on what action it will take on Safaricom, if any, but he had not responded by press time, with his line indicating he was busy. His communication officials earlier said they would respond to our queries but had not responded by the time of going to press.

“We confirm receipt of your request. We shall revert at the earliest opportunity,” said CA in response our queries. Safaricom equally had not responded to Standard's additional queries on the course of the perennial outages by press time.

An operator found in breach risks a fine of up to 0.2 per cent of its revenues, which could run into hundreds of millions.

CA has been considering imposing steeper penalties on operators that offer poor-quality voice, data and messaging services.

Before the adoption of the 0.2 per cent gross revenue fine, firms were required to pay a flat rate of Sh500,000, which the communications regulator at the time deemed too lenient.

In 2017, the CA slapped Safaricom with a hefty penalty of Sh270 million for failing to meet the set standards on call quality.

The recent M-Pesa outages reignited debate about the separation of the money transfer service from Safaricom.

The debate, which has been simmering for years, centres on concerns that M-Pesa is virtually synonymous with mobile money in Kenya, with over 29 million active users. This dominance, some argue, stifles competition and innovation in the fintech sector.

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