Phone firms scoff at plan to raise penalty slapped on poor service

By: LILIAN OCHIENG

Telecom operators have faulted a move by the Communications Authority of Kenya (CA) to increase quality of service penalties starting January, noting that it will hurt their revenues.

CA Director-General Francis Wangusi announced Monday that operators would be penalised 0.2 per cent of their gross turnover for offering poor quality service.

Mr Wangusi said the enhanced penalties will act as a warning to operators to strive to offer better services to consumers. Lenient fines have led to continuous poor offering to clients, he noted.

He said the previous Sh500,000 penalty had brought about a surge in sub-standard offering to consumers.

Safaricom and Telkom Kenya have said the move is the worst way to manage concerns of poor services to consumers.

“We question whether this is the correct method to manage such concerns. Stiff penalties could have the unintended effect of operators reallocating resources that could have been used to reinvest in new base stations,” said Safaricom Corporate Affairs Director Stephen Chege last week.

Telkom Kenya Chief Executive Vincent Lobry agreed with Safaricom, adding: “We impress upon our regulator to consider addressing this issue concurrently for the long term; if telcos are to improve on cost efficiencies, which will lead to even better competitive pricing and service provision to the end user.”

Airtel stayed mum on the matter.

The two operators urged the authority to instead create an environment that will allow them to grow but not hinder productivity.

PARTING WITH MILLIONS

The CA quality of service report for the year 2013/2014 says that Safaricom, Airtel and Telkom Kenya achieved an overall rating of 62.5 per cent, below set targets.

They were fined Sh500,000.

If the regulations are applied, Safaricom, which recorded a Sh163.4 billion turnover in the year to March will part with Sh326.8 million if it breaches the quality standards.

Airtel and Telkom Kenya could also part with millions since they are believed to make billions of shillings every year.

Operators have in the past questioned the methodology used to assess quality of service.

Last year, they called for the standards to be reviewed, saying the 2014 results were against investment efforts made by them.

In line with the legislation to ensure quality standards, CA has bought new equipment to help monitor service delivery.