Safaricom and Airtel Kenya have been offered temporary operating licenses for two years, pending agreements on permit fees, how to allocate spectrum and penalties in the event of voice outages.
The Communications Authority of Kenya (CA) has chosen not to grant companies permits during the traditional ten-year period pending a review of regulations that would change the telecommunications landscape in the country.
The review seeks to offer spectrum auctions to the highest bidder instead of the current system where the regulator offers frequencies on demand.
This will allow the TRA to negotiate higher spectrum fees from bidding rounds and eliminate speculators from the licensing market.
The regulator is also seeking new rules that would set quality standards as well as penalties and compensation for consumers for interruptions in data, SMS and voice services.
Telecom operators are currently not obligated to compensate their subscribers for dropped calls, a legal loophole that protects companies amid rising rates of network disruption in different parts of the country.
“We have granted the companies licenses for two years pending negotiations on permit payments, frequency allocation and quality of service,” CA Director General David Mugoni said. Daily chores In response to a text message.
The negotiations will be for longer periods.”
CA said Safaricom was offered a two-year permit from June 25 and paid $12.64 million (Sh1.63 billion) and another Sh6 million.
Airtel Kenya paid $3.82 billion (494.2 million shillings) and an additional 6 million shillings, raising its bill to half a billion shillings for a two-year license extending from next January to 2027.
Previously, telecom operators paid Sh2.3 billion to the industry regulator for their 10-year permits.
Mr Muguni said Airtel’s charges were lower because it had less spectrum compared to Safaricom – the dominant operator.
Safaricom has downplayed the importance of shorter and temporary licensing.
“We have just been given an extension until we complete the full renewal process, including whether the term will be 10 or any other term that the regulator may specify,” said Peter Ndegwa, CEO of Safaricom.
He added: “At this stage, there is nothing to be read from the two-year extension other than giving enough time to do the renewal in the right way.”
Companies have previously expressed concerns about measuring quality checks and compensating customers for violations.
An expired bill sought to force telecom operators to pay customers up to Sh30 per day for dropped calls due to interruptions in voice service.
It required Safaricom, Airtel and Telkom Kenya to refund callers a maximum of Sh30 per day for up to three dropped calls per day.
The proposed law was expected to push telecom operators to invest more and significantly improve the quality of calls and mobile services in an attempt to avoid compensating their subscribers.
The companies were previously cited by CA for failing to meet the 80 percent minimum for call quality in more than 30 counties.
The parameters used to determine the quality of voice services are dropped calls, voice quality and call setup time while delay ratio, internet accessibility and data transmission failure determine the quality of internet services.
CA uses metrics such as end-to-end delivery rates, completion rates, and percentage of successful SMS messages to determine the quality of messaging services.
Kenya seeks to join Western countries where users of telecom services are compensated in the form of a credit on their bill after a network outage.
Service outages on the Safaricom network rose nearly five-fold to an average of 19.5 minutes per week in the year ending March 2024, new disclosures showed.
The network outage, attributed to a power outage, left Safaricom customers unable to make calls, send text messages, use data or send money points.
Currently, the California Telecommunications Operators Commission issues spectrum licenses on a first-come, first-served basis, and the approval process takes 135 days.
Countries that use auctions to issue licenses include Japan, the Netherlands, India, Vietnam and Chile. In Africa, Ethiopia, Tanzania and South Africa have successfully issued licenses through auctions.
Spectrum auctions are widely considered “best practices” in allocating radio frequencies where demand exceeds availability.
In Kenya, telecom operators are allowed to hold licenses temporarily, a scenario that appears to change if the country adopts license auctions.
“On 6 September 2024, Airtel Kenya received confirmation from the regulatory body on the extension of its existing Network Facilities Provider, Application Service Provider, Content Service Provider, Gateway Terminal and International Service license as well as its spectrum in the 900MHz, 1800MHz and 2100MHz bands,” Airtel Africa Plc said in a statement. A reference to its local subsidiary which was scheduled to be renewed in January 2025 for a period of 24 months from January 2025.
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