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Safaricom loses bid to bar Canada telco from its network

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Safaricom PLC headquarters in Westlands, Nairobi. PHOTO | DENNIS ONSONGO | NMG

Safaricom #ticker:SCOM has lost its bid to stop a Canadian-owned telecoms firm from offering internet-based calls through its network.

This is after the Communications and Multimedia Appeals Tribunal struck out a case where Safaricom sought to terminate a contract it signed with Iristel Kenya Limited, a subsidiary of Iristel Canada.

Safaricom had sought to cancel the contract on allegations that Iristel Kenya will engage in SIM boxing which is a threat to national security and that the firm did not indicate the service it would offer.

SIM boxing is a malpractice where service providers terminate international calls disguised as local by re-originating the foreign calls using local numbers to pay cheaper rates.

“It is, therefore, our (tribunal) unanimous finding that the appeal lacks merit and the same stands dismissed. Having signed the agreement, the appeal has been overtaken by events, and parties can, therefore, only be bound by the terms of the agreement,” Rosemary Kuria, the chair of the tribunal, ruled.

Safaricom filed the appeal at the tribunal after raising its concerns with the Communications Authority of Kenya (CA) and which were dismissed.

“The Interested Party (Iristel Kenya) to submit information/evidence in support of their purported local subscription and locally offered products which would necessitate local interconnection without the risk of SIM boxing,” Safaricom had said in the appeal.

But the CA rejected Safaricom’s arguments, saying Iristel Kenya’s similar deals with Safaricom’s rivals had not attracted concerns. The regulator added that Safaricom’s move was unfair.

The CA banned SIM boxing three years ago after Safaricom accused US firm, Geonet Communications Limited, of illegally terminating international voice traffic on its network.

The regulator then ordered Safaricom to start and conclude interconnection negotiations with Iristel Kenya within six months from April last year. Safaricom complied but went to the tribunal.

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