Communications regulator imposes stiffer penalty for poor telecom services

The Communications Authority of Kenya (CA) board has set 0.2 per cent of the annual gross turnover as the penalty for telecommunication firms that offer substandard services, setting the companies up for heavier fines.

Francis Wangusi, the CA director-general, said Monday the new penalty will be effective in July next year and will also see data or internet providers subjected to the new penalties.

The current fine stands at a flat rate of Sh500,000 which Mr Wangusi reckons is too lenient and has failed to give operators the incentive to comply with established quality of service (QoS) standards.

“We have made the penalties on the breach of QoS stiffer as a way of motivating the operators decide either to pay 0.2 per cent of their annual gross turnover to the authority or to plough back the money and improve their network quality,” Mr Wangusi said.

At 0.2 per cent of annual gross turnover, the new fine could result in penalties running into tens of millions of shillings for the telecoms operators.

Safaricom, which recorded sales of Sh164.4 billion in the year ended March, would for example be liable to a fine of up to S28 million if it were to be penalised.

The other main mobile phone companies, Airtel and Orange, do not disclose their annual turnover figures but these are also in the billions of shillings.

Mr Wangusi said the regulator has enhanced its measuring mechanism by upgrading its quality of service monitoring system from the initial Q-Voice system to the more modern MTP4 Tems Discovery version.

“This system is in line with global ICT standards and provides an all-inclusive framework that measures the quality of voice, data and SMS services,” he added.

The CA requires the operators to achieve a score of 80 per cent on eight indicators, including speech quality, completed calls, call success rate and drop rate.

None of the three mobile phone operators – Safaricom, Airtel and Orange – met the threshold in the year to June last year.

READ: Telecom firms to pay hefty penalties for poor service

The stiffer penalties come at a time when the regulator is in the process of recruiting independent external contractors to carry out simultaneous assessment of quality of service countrywide.

The CA said 14 firms have expressed interest in the tender to conduct the quality of service survey, and the regulator is in the process of selecting the winner.

The regulator has previously conducted the survey independently on an annual basis, but the quality tests will be done by a private firm quarterly under the new regime.

CA will also assess other services offered by the telcos like data, mobile money transfer services and their infrastructure. The previous tests focused on voice quality.

This means that Internet service providers like AccessKenya, Wananchi Group and fibre optic companies such as Jamii Telecoms and Liquid Telecoms will now be subjected to the quality checks.

Kenya is following in the footsteps of Nigeria and Rwanda, which introduced hefty fines against telcos that did not meet quality checks.

Nigeria in 2012 fined four telcos a combined $7.4 million (Sh636.4 million) for failing to meet minimum service standards.

Rwanda in 2011 revoked the licence of Rwandatel for poor service and slapped MTN Group a daily fine of $4,000 (S47,000) due to substandard services and network failure.

The financial penalty was applicable until the South African tech giant fixed the problem. In Kenya, the quality assessment started four years ago.

SOURCE: BUSINESS DAILY