Updated Monday, July 15th 2013 at 22:36 GMT +3
By Macharia Kamau
Telecommunication firms face hefty fines in coming months for failure to adhere to the terms of their licences, including quality of services.
The Communications Commission of Kenya (CCK) is amending the
Kenya Information and Communication Act and in its proposals, the
regulator wants the fines to telcos to be based on their revenues. It
has also proposed to backdate this to the number of years that the
telcos have committed the offences as opposed to starting on a clean
slate.
This is in comparison to the current regime where fines are at a fixed Sh500,000 for players that go against the terms of their licences. CCK thinks the penalty is too lenient for players that whose turnover run into tens of billions of shillings per year and may not be adequate to keep the telcos on their toes especially where quality of service is concerned.
The regulator wants operators to pay one per cent of their revenues as fines whenever they are found guilty of an offence. The amendment bill, which is still in its draft stages, also wants these backdated to the years that the offence has been committed.
The amendment proposes that telcos pay a fine “of Sh100,000 or one per cent of the annual gross turnover of the offending licensee for every calendar quarter… in which the offence is continuing, whichever is higher”.
Among the areas that telcos have been gross offenders include offering of substandard services. An annual survey by CCK on quality of service among the four mobile service providers has found the quality wanting and it has threatened to penalise them.
While the telcos have voiced their concerns about the manner in which the regulator undertook the survey, they also concede that there are certain instances where their services have not been the best.
sake of millions
“We have tweaked what is in the act currently to reflect the annual gross turnover of the offending licensee. At the moment the penalties are not proportionate to the offence of the damage… the amendments are aimed at keeping the operators within the scope of their licences.” The operators are likely to try to water down the amendments during the consultative stages but telecoms analyst Peter Wanyonyi notes that CCK should stand its ground on this one, especially for the sake of millions of customers that suffer when operators do not adhere to the terms of their licences.
“I think the flat-fine approach has not worked. The telecom operators in the country generally make such large profits that a flat fine achieves little, if anything,” he said.
“Tying the penalty to the operator’s turnover is appropriate because it introduces proportionality to the sanction: the higher the number of customers an operator has, the large the number of them affected when the operator defaults on a given performance indicator, and so the larger should the sanction be.”
Telecommunication firms face hefty fines in coming months for failure to adhere to the terms of their licences, including quality of services.
This is in comparison to the current regime where fines are at a fixed Sh500,000 for players that go against the terms of their licences. CCK thinks the penalty is too lenient for players that whose turnover run into tens of billions of shillings per year and may not be adequate to keep the telcos on their toes especially where quality of service is concerned.
The regulator wants operators to pay one per cent of their revenues as fines whenever they are found guilty of an offence. The amendment bill, which is still in its draft stages, also wants these backdated to the years that the offence has been committed.
The amendment proposes that telcos pay a fine “of Sh100,000 or one per cent of the annual gross turnover of the offending licensee for every calendar quarter… in which the offence is continuing, whichever is higher”.
Among the areas that telcos have been gross offenders include offering of substandard services. An annual survey by CCK on quality of service among the four mobile service providers has found the quality wanting and it has threatened to penalise them.
While the telcos have voiced their concerns about the manner in which the regulator undertook the survey, they also concede that there are certain instances where their services have not been the best.
sake of millions
“We have tweaked what is in the act currently to reflect the annual gross turnover of the offending licensee. At the moment the penalties are not proportionate to the offence of the damage… the amendments are aimed at keeping the operators within the scope of their licences.” The operators are likely to try to water down the amendments during the consultative stages but telecoms analyst Peter Wanyonyi notes that CCK should stand its ground on this one, especially for the sake of millions of customers that suffer when operators do not adhere to the terms of their licences.
“I think the flat-fine approach has not worked. The telecom operators in the country generally make such large profits that a flat fine achieves little, if anything,” he said.
“Tying the penalty to the operator’s turnover is appropriate because it introduces proportionality to the sanction: the higher the number of customers an operator has, the large the number of them affected when the operator defaults on a given performance indicator, and so the larger should the sanction be.”
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