Safaricom, Kenya telecom watchdog on collision path

Nairobi – Kenya’s Safaricom is headed for a clash with the Communications Commission of Kenya (CCK) ahead of its licence renewal over voice quality standards.
A Safaricom M-Pesa dealer serves a customer. The telecom firm controls over 80 per cent of the Kenya market.  Net photo
A Safaricom M-Pesa dealer serves a customer. The telecom firm controls over 80 per cent of the Kenya market. Net photo

Nairobi – Kenya’s Safaricom is headed for a clash with the Communications Commission of Kenya (CCK) ahead of its licence renewal over voice quality standards.

The regulator has labelled Safaricom a non-compliant operator in the year to June with a performance score of 50 per cent against the minimum target of 80 per cent on eight indicators in a report to be released this week.

The CCK has tied the renewal of Safaricom’s licence, which is due before June, to paying sh2.3b and achieving the minimum quality standards. This has drawn protests from the Nairobi bourse listed telecom operator.

“Our view is that punitive measures will not assist the industry to achieve better quality of service measures as they will divert resources from operators which could have been applied to improving coverage and network quality,” Bob Collymore, the Safaricom chief, said in a statement.

“We believe that CCK can adopt a modern and collaborative methodology which will allow the operators to respond quickly and ensure customers have a good experience.”

The CCK found all the four mobile phone operators, including Airtel, Orange and Yu, failed to meet minimum quality of service standards in the year to June.

This is worse verdict than the previous period from an industry perspective given in the year to June 2012, the smaller operators, Orange and Yu, were compliant.

Safaricom, Airtel and yuMobile tied on a score of 50 per cent in the year to June while Telkom Kenya had a 62.5 per cent mark.

In 2012, Safaricom had the worst score of 50 per cent, while Airtel was rated at 62.5 per cent. Telkom and Essar both achieved 87.5 per cent.

CCK attributed the drop in performance to the enhancement of the weight of the eight indicators, including speech quality, completed calls, call success rates and call drop rate.

“The current assessment framework uses the enhanced KPIs that were applicable three years after the adoption of the framework,” says CCK. Safaricom has questioned the CCK’s indicators, terming them erroneous, adding that an independent report based on international benchmarks has given it a clean bill of health.

The conflicting positions are set to play out when the regulator and Safaricom meet in coming weeks for talks over the license renewal.

Francis Wangusi, CCK director-general, said earlier that Safaricom had failed to meet the quality standards over the past three years.

“The renewal of the licence shall be dependent on Safaricom’s commitment to adhere to the set minimum quality of service standards by June 30, 2014, and successful conclusion of negotiations on the new terms and conditions,” said Wangusi.

“We have also considered the fact that whereas Safaricom has met most of its licence obligations, its continued failure to meet the set quality of service standards remains a concern that needs to be addressed.”

Since its licensing in July 1999, Safaricom has had a great impact on the Kenyan economy with innovative products like M-Pesa, Okoa Jahazi and M-Shwari besides controlling 80.2 per cent of Kenya’s mobile phone voice traffic.

Airtel and Essar hold 10.4 per cent and eight per cent of the market share, respectively.

Constraints

Safaricom reckons that it only failed to meet the 80 per cent limit on one indicator — speech quality.

“Safaricom has consistently stated that it is investing substantial amounts of money to improve its network infrastructure. This financial year alone, we have committed sh27b towards this goal,” said Collymore.

The firm has laid own inland fibre optic cable, upgraded most of its sites to 3G and is pushing CCK to award it additional frequencies to rollout 4G network for high-speed wireless services.

“One of the key constraints that we face is adequate spectrum to enable us deliver the required levels of service,” added Collymore.

The operators are currently fined sh500,000 for breach of the quality of service standards and the State is looking to raise the fines, saying the current penalty is too lenient and has failed to make the operators comply.

Kenya is seeking to follow in the footsteps of Nigeria, Zambia and Rwanda, which introduced hefty fines against operators that fail to meet quality checks.

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