Safaricom to pay $27m for licence renewal

Telco has consistently failed to meet service standards, regulator says
Nairobi skyline. Safaricom remains Kenya's biggest mobile operator, almost 15 years after it launched operations.
Nairobi skyline. Safaricom remains Kenya's biggest mobile operator, almost 15 years after it launched operations.

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Safaricom, Kenya’s biggest mobile operator, will pay Ks2.36 billion ($27million) for renewal of its operating licence for a further term of 10 years.

The telco originally paid $55 million for a 15 year GSM licence in July 1999.

CCK said recently that the renewal of Safaricom’s licence would depend on the operator meeting the set minimum quality of service standards by June 2014.

Safaricom’s initial licence term of 15 years is set to expire on June 30, 2014 but has a “provision for a possible renewal” for a further term of 10 years, according to the CCK.

Francis Wangusi, director general of the CCK, said the renewed Safaricom licence would include a set of new licence terms and conditions negotiated beforehand between the regulator and the mobile operator.

The licence renewal fee of $27 million is based on the bid price offered for the third GSM mobile licence by the latest entrant to the mobile telecoms market in Kenya -Econet Wireless Kenya Ltd (now Essar Telecom Kenya Ltd).

Wangusi said that while Safaricom had significantly contributed to the economy, developed innovative products and services and met most its licence obligations, the mobile operator had consistently failed to meet the set quality of service standards.

‘‘We have considered the fact that whereas Safaricom has met most of its licence obligations, its continued failure to meet the set Quality of Service standards remains a concern that needs to be addressed,’’ Wangusi said.

The renewal of Safaricom’s licence for a further term of 10 years would be subject to an upfront payment of a renewal fee of $27 Million, Wangusi said.

He added that the three other mobile operators would pay the same amount for renewal of their licences for a further term of 10 year to ensure parity and a level playing ground for all service providers in the sector.

CLICK HERE to read a full interview with Samuel L. Poghisio, Kenya’s Minister of Information and Communications.

 

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