Safaricom pays Sh2.3 billion licence fee ahead of deadline

Safaricom’s licence has been renewed after it paid Sh2.3 billion to the industry regulator, signalling that the operator has reached a deal over the quality voice checks.

Safaricom’s current licence expires on Monday and the Communications Authority of Kenya (CAK) had tied its renewal to payment of the fee and meeting the set quality standards as the government steps up pressure on mobile telephone firms to improve service.

“We have issued Safaricom with a letter to confirm that their licence has been renewed and they can come any time and pick it now that they have paid the Sh2.3 billion,” Francis Wangusi, the CAK director-general, said yesterday.

Safaricom has over the past four years failed to meet the quality standards and last year posted a performance of 50 per cent against the minimum limit of 80 per cent. The regulator dropped the quality demand after Safaricom challenged the veracity of the assessments. 

Safaricom maintained that its independent assessor had given it a score of 87.5 per cent, a rating that sparked a disagreement between the mobile operator and regulator. “The negotiations went well and we reached an agreement with the regulator on most of the conditions. On the quality of service, we agreed that CAK should engage an independent firm to conduct an independent fresh study,” Bob Collymore, Safaricom’s CEO, told the Business Daily recently.

The communications regulator says Safaricom’s new licence will be tendered afresh ahead of its expiry in 2024 and other operators will be invited to bid. The inaugural permit was issued in July 1999 for a term of 15 years at a fee of $55 million (Sh4.7 billion).

The new licensing round will earn CCK Sh4.6 billion over the next two years given that Airtel will be expected to pay Sh2.3 billion — which yu paid as Kenya’s fourth operator in 2003 — by June 2015.