Telcos face huge penalty as CA ties quality charges to revenues in review

Communications Authority of Kenya boss Francis Wangusi. PHOTO | FILE 

By LILIAN OCHIENG, laochieng@ke.nationmedia.com

In Summary

• The CA did not, however, contract any consultant, arguing that the bidders were too expensive. “This exercise would have cost us over Sh1 billion for one quality of service study. We, therefore, decided to go back to the drawing board to look for other options,” said Mr Wangusi.
• The report states that out of the eight parameters, all operators complied on handover, call set up time and signal strength indicators. There was also a remarkable improvement on the quality of speech for all the operators.

All telecoms operators will have to pay a penalty equivalent to 0.2 per cent of their gross turnover for offering poor quality services to consumers in the year 2014-2015.

The Communications Authority of Kenya (CA) says Airtel, Safaricom and Telkom Kenya fell short of the 80 per cent target quality mark. The operators have not met the threshold for the third year in a row.

They all attained 62.5 per cent, as per the latest CA report.

The report states that out of the eight parameters, all operators complied on handover, call set up time and signal strength indicators. There was also a remarkable improvement on the quality of speech for all the operators.

“However, overall performance of all the operators remained stagnant during the year,” says the report, “Performance was best in Nairobi and worst in Upper Eastern and North Rift region.”

READ: CA imposes stiffer penalty for poor telecoms services

CA director- general Francis Wangusi said operators have been paying a flat rate of Sh500, 000 for non-compliance, which is too lenient. Safaricom that recorded revenues of Sh164.4 billion in the year ended March 2015 would, for instance, be liable to Sh328 million fine.

Airtel and Telkom Kenya do not publicly disclose their financial reports, however, they are believed to earn billions of shillings in revenue and could equally be penalised in tens of millions.

Operators had last year termed the parameters of quality service as unfair, prompting CA to begin recruiting a consultant to assess quality of service countrywide and ascertain the depth of service coverage. The consultant was also to recommend a new method for service quality assessment.

The CA did not, however, contract any consultant, arguing that the bidders were too expensive. “This exercise would have cost us over Sh1 billion for one quality of service study. We, therefore, decided to go back to the drawing board to look for other options,” said Mr Wangusi.

Safaricom and Airtel had not responded to our queries on the matter by the time of going to press.

Independent study

Nonetheless, Safaricom Corporate Affairs director Stephen Chege in an interview last year said, “we question whether this is the correct method to manage such concerns as such stiff penalties could have the unintended effect of operators re-allocating resources that could have been used to reinvest in new base stations.”

The regulator has been conducting the survey independently annually.

To ensure that consumers are well served, the CA will begin assessing mobile money transfer, SMS and data coverage and performance. Voice has been key in the previous quality surveys