CCK locks telecom firms out of key fun

CCK headquarters in Nairobi. Photo/FILE 

By Okuttah Mark
 

 

In Summary

• The firms will start making payment equivalent to 0.5 per cent of their revenue beginning July, but the kitty will be exclusively administered by government officials.
• The government intends to raise at least Sh1 billion annually from the mobile operators, broadcasters, ISPs and courier operators.

The telecoms industry regulator has rejected operators’ appeal to be involved in the management of a fund for supporting infrastructure in remote areas.

The firms will start making payment equivalent to 0.5 per cent of their revenue beginning July, but the kitty will be exclusively administered by government officials.

Dubbed Universal Service Fund (USF), it will be under the Communications Commission of Kenya (CCK) after the regulator locked out the operators from the Universal Service Advisory Council which will operationalise the kitty.

The government intends to raise at least Sh1 billion annually from the mobile operators, broadcasters, ISPs and courier operators.

Among the key issues that the government wants to address include increasing high-speed internet access, erecting mobile telephony masts in North Eastern, and upgrading data masts in remote areas. Investors consider such areas commercially non-viable.

Susan Mochache, the assistant director USF at CCK, said the decision not to include telecoms operators in the advisory board was to avoid conflict of interest.

“We will not include the telecoms operators in the management of the fund as this will result in conflict of interest since the same operators are expected to bid for the rollout of projects in marginalised areas,” she told a media briefing.

Wednesday, Kenya Telecommunications Network Operators (KTNO) called for the board to be reconstituted in order to accommodate them.

“It is difficult to determine which interest each of the appointees represents. We would therefore wish for reconsideration of this matter, and in particular, reconstitution of the USAC in order to allow for fresh appointments after proper consultations,” the organisation said.

Mobile firms, led by Safaricom, have previously demanded to be included on the board that will manage the fund.

The six board members to manage the fund are Francis Limo (chairman), Joseph arap Bett, Joseph Watakah, Rosemary Kilonzo, Rukia Ahamed, and Sammy Buruchara.

They will be members of the Universal Services Advisory Council for a year. The levy is, however, expected to have a dent on the mobile firms’ revenue with Safaricom expected to generate the largest percentage.

READ: Mobile firms to pay millions for new ICT fund

 

The firm is expected to pay Sh620 million to the fund based on its turnover of Sh124 billion in the year ended March 2013. “KTNO members suggest that the contribution be time-bound and limited to one or two years and thereafter the USF should strive to be self-sustaining,” the lobby said. The firms are also pushing for funding to be through grants

.

The government is keen on having the fund operational to spur growth of the ICT sector and accelerate the development of other sectors of the economy, including provision of government services.

According to the ICT Access Gaps Study undertaken by CCK last year, close to 1,120 sub-locations out of a total 7,149 in the country have no access to basic communication services.

“We have finalised everything and expect the fund to be operational by July 1, with operators paying half a percentage point of their total revenue which is way below what other countries charge,” said Ms Mochache.

It has taken Kenya almost 10 years to make the fund operational. The new one came after a study was conducted in 2004.