Heavy fines for Kenya’s wayward telecoms imminent

The Kenyan government has warned mobile network operators in the country that they will face heavy fines if they keep maintaining their “poor services”.

Kenya’s communications industry regulator the Communications Commission of Kenya (CCK) said that current fines are “too lenient” and could be responsible for the mobile service providers’ failure to comply with regulations meant to ensure mobile users access quality services.

According to Dr. Bitange Ndemo, the Ministry of Information and Communications Permanent Secretary, the CCK uses eight key performance indicators (KPIs) agreed upon between the commission and the mobile firms, including call set-up time, handover success rate, dropped calls, blocked calls, speech quality and signal strength.

In the last Quality of Service report by the CCK, “none of the operators met the threshold, and all were fined,” Ndemo said.

It could signal another financial blow to the operators after the country’s treasury department announced it will levy taxes on mobile money transactions, with costs set to rise by up to 10 percent, according to a HumanIPO report.

CCK reports released yesterday indicated that the mobile market in the country is fast growing, which experts believe prompted the government through the Ministry of Finance to announce it will increase fines on errant mobile service providers and levy taxes on mobile money transactions.

“This sector is the fastest growing and so the taxman should also get his bite. I expect this measure to generate close to Sh4.5 billion immediately, but I do not expect any increase in airtime or the charges to the customer,” Robinson Githae, Minister of Finance, said.

Kenya’s government believes it can earn some KSh4.5 billion ($52.7million) from mobile transfer transactions and believes that as voice revenues take a hit, mobile money can alleviate the shortfall, The Standard reported.

According to the country’s treasury department however, the changes will not affect consumers as the tax will be solely incurred by the mobile service providers.

Increasing fines and levying tax on mobile money transactions for service providers with a promise of no effects on consumers is, however, viewed by analysts as “not possible”.

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