Mobile Operators Reject CA Proposal Citing Inconsistency in the Allotment of Spectrum fees

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Communications Authority of Kenya. / COURTESY

Mobile operators have raised concerns over some proposals in the Frequency Spectrum Management Guidelines 2020 by the Communications Authority (CA)

The proposals include setting aside spectrum for use by the national and county governments; and additional penalties to service providers in cases of interference and under-utilization.

Service providers are also in dispute with the proposal to have some operators exempted from paying spectrum fees that could run into billions of shillings.

Read: CA Exposes Debt That Led To Telkom Transmitters Being Switched Off, Eaton Towers Ordered To Restore Services

Spectrum fees are paid by operators to allow them occupy specific radio frequencies where they channel their services.

“Licensees will be required to pay requisite frequency fees prescribed by the Authority as and when they fall due,” states the proposal in part.

“Failure to which will result in penalties or other actions as stipulated in the authorisation instrument (the license), the Act and the regulations. However, this will not be applicable to licensees who have been exempted from payment of frequency fees.”

Read also: Lesotho Gets Africa’s First 5G Network From Vodacom

Safaricom has rejected the proposal, asking the regulator to treat all operators equally.

“In the spirit of fair treatment, all licensees should be treated equally in so far as payment of license fees is concerned,”  the telco said in its submissions to the regulations

“The authority should reinforce this guideline to seal off any loopholes relied upon in the past by some licensees to evade paying the fees.”

Read also: Number Of Telkom, Airtel Internet Subscriptions Decline Over Merger Uncertainty- CA

In the financial year 2018/2019, the CA collected Sh8.9 billion revenue from spectrum fees. Out of the entire amount, Sh7.6 billion came from service providers.

The distribution of the payment of spectrum fees by the CA has been disputed severally, with service providers terming it unfair.

In 2015, CA sent a Sh2.3 billion demand letter to Airtel Kenya, despite the fact that their frequency still had another two years before expiry. This, CA said, was a condition they had to meet for a new 10 year lease.

Read also: Competition Tribunal Eases Merger Conditions For Airtel and Telkom

Airtel protested the fees, arguing that its 2014 acquisition of Essar’s YU Mobile had extended their operating licence to 2024 and that the CA had granted a letter to corroborate the agreement.

However, Treasury demanded the collection of the monies, arguing the CA had no powers to waive off such colossal amounts in fees.

The case dragged in court for three years before a court ruling was made in Dec 2017, in favour of Airtel.

Read also: Safaricom CFO Sateesh Kamath Takes Up New Role In Vodafone

In the same year (2017), the CA board Chair Ngene Gituku was taken to task to explain how Jamii Telkom had been granted a 4G licence for Sh100,000 while other operators were paying Sh2 billion. In a rejoinder, CA said that Jamii Telkom’s licence was on a trial basis.

An amendment made on the Kenya Information and Communication Act in 2019 now allows operators to pay licence fees of up to Sh1 billion in installments.

Service providers such as Qualcomm have requested for waivers to cut capital investments. In response, CA has said that only treasury has the powers to review spectrum fees.

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Written by Vanessa Murrey

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