CA puts IT firms on notice over unpaid fees, lack of returns

The Communications Authority of Kenya (CA) has issued a notice to revoke hundreds of licences held by dormant IT firms citing their non-payment of regulatory fees and failure to file returns.

Among the Internet service providers (ISPs) set to lose their licences are the Postal Corporation of Kenya (PCK), Jambo Telkom Limited and Mitsuminet.

Business process outsourcing (BPOs) firms facing licence revocation include KenCall, Skyweb-Evans, Jambo Call and Information Centre and Ken-Tech Data Limited.

The list also includes hundreds of telecommunication contractors and technical personnel.

The names are contained in the Friday Kenya Gazette Notice. The CA has asked the public to file any objections to the revocations within four weeks from June 6.

“The reason for the revocation of the licence is non-payment of fees and ceasing to engage in the business for which the licence was granted,” reads part of the notice.

Some of the firms listed such as Uunet and Swift Global technically ceased operations after they were acquired or merged with their new owners.

South African telecommunication firm MTN acquired Uunet in 2009 and later rebranded it to MTN Business, while Swift Global was acquired by Liquid Telecoms in 2013 in a joint buyout that also included KDN. 

The list, however, provides an insight into how firms in some market segments such as BPOs found it hard to do business in Kenya and folded up or could not match the competition from big players, especially top mobile operators, after the introduction of a new licensing regime in 2010. 

The then  Communication Commission of Kenya CCK’s licensing regime change allowed firms such as Safaricom, Airtel and Telkom Kenya to operate both as wholesalers and retailers.

The entry of the likes of Safaricom ate into the market share of the ISPs largely concentrating on the bottom end of market.

Most ISPs and content providers have found it hard to compete with tier one operators, especially at the bottom end of the market. This led some firms such as Flashcom, which the CA has now listed for revocation of licence, to close shop.

The revocation of the licences comes on the backdrop of growth decline in the sector. The Kenya National Bureau of Statistics (KNBS) Economic Survey for 2016 indicates that the sector grew by 7.3 per cent compared to 14.6 per cent in 2014.