Equity Bank has spoken out against the Consumer’s Federation of Kenya (COFEK) to refute its allegations that the bank’s mobile virtual network operator (MVNO), Finserve Africa, was wrongfully allocated scarce public resources including spectrum.
HumanIPO reported in April the Communications Authority of Kenya (CAK) issued three MVNO licences, one of which went to Equity Bank’s subsidiary Finserve Africa Limited.
COFEK launched legal action in June opposing the licences, claiming the grant of the licences was unlawful as there was no stakeholder and public consultation, including regarding the allocation of “scarce natural resources” COFEK said is involved in the licences.
Finserve today defended its position, denying that the spectrum allocated to it constitutes a scarce public resource, while also saying that the agreement between the mobile network operator (MNO) – Airtel – and the MVNO is a private contract procured through negotiations.
Given the private nature of the agreement, Finserve said COFEK has no role to play in the negotiations since it cannot force the MNO to lease its facilities.
“To the extent therefore that the arrangement between the MNO and the MVNO is private in nature, I verily believe that the provisions of the Public Procurement and Disposal Act 2005 do not apply,” Finserve said.
“This allegation is without any or any valid basis because the numbering range is not a scarce public resource as alleged. In any event, that argument can only apply to un-alienated spectrum,” Finserve said.
“In this case, the spectrum had already been alienated and allocated to Airtel and did not constitute un-alienated public resource.”
Equity Bank said COFEK’s allegations are at best speculative, preemptive and based on mere suppositions, and that they cannot constitute a cause for legal action.
The bank called for the legal challenge to be dismissed, saying it has no reasonable foundation.
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