The sour relationship between Safaricom and the regulator, Communications Authority of Kenya (CA) does not seem to be end any time soon. In recent news, Safaricom has secured a temporary injunction to prevent the Communications Authority of Kenya (CA) from imposing a Kshs 449 million (US$4.5 million) fine for alleged refusal to connect calls made to smaller operators. The telco is hoping a court will make the injunction permanent.
According to the CA it received complaints by Elige Communications Ltd. that Safaricom had blocked calls to its network and Safaricom had refused to follow its directives to help resolve the issue.
“The Authority considers this an act of blatant disregard of not only other licensees’ rights but also the Authority’s directives and in contravention of license conditions,” stated the CA.
Elias Mwangi, Head of Operations at Elige Communications Ltd reiterated: “What we are facing has happened in other countries. The fight between OTTs and MNOs as technological advancements create avenues for disruptive services.”
In response, Safaricom said it has complied with all directives from the regulator and also accused Elige of flouting its licence conditions by carrying international traffic instead of local calls.
“It is illegal to allow such international voice traffic to be terminated by a locally licensed operator into another network through the local interconnection link,” said Safaricom.
The telco managed to secure the suspension of the fine, representing 0.2% of its gross revenue for the last financial year, after it claimed it would suffer “substantial loss and irreparable damage if the CA’s decision was executed.”
The fine has now effectively been placed on hold until the industry tribunal hearing. There is no confirmed date as to when the hearing will take place.
Safaricom’s regulatory and public policy department head, Mercy Ndegwa, has, however, issued a supporting affidavit that guarantees the company will pay the penalty in the event it is unsuccessful with its appeal.
“The applicant is a public company and is acknowledged to be the most profitable company in Kenya and will no doubt be in position to remit the penalty without delay in the unlikely event that the appeal is unsuccessful,” stated Mercy in the affidavit.
Industry expert Eric Musau, a research analyst at Standard Investment Bank, mentioned that the CA is trying to entrench its authority by imposing the fine.
“If this is the trend and there are other violations, it tells you the CA will be able to take tough decisions,” Musau said.
Safaricom controls 67% of market share in Kenya and has been at loggerheads with the regulator over competition.
Growing concern over the company’s dominance reached a pivotal point in 2017 when Jakoyo Midiwo, deputy minority leader in Kenya’s national assembly, called for the telco to be broken up into silos.
In February 2018 we once reported that the CA said it will consider the findings of a study it commissioned on the competitiveness of the country’s telecommunications sector before implementing its recommendations that include trade restrictions
Related
