Mobile operator Jamii Telecom’s (JTL) proposal last year to have payment of spectrum fees to the Communications Authority of Kenya spread out over a 10-year period sailed through following Parliament’s approval of an amendment contained in the miscellaneous Bill that was assented in January.
The amendment of the Kenya Information and Communications Act (KIC 1998) now allows the Authority to permit companies, where Kenyans hold a majority stake of at least 51 percent, to pay licence fees in equal instalments over a decade.
This provision means that local telcos like Jamii Telecom and Equity Bank’s Finserve Africa, for instance, will part with Sh250 million every year over the permitted period to get the Sh2.5 billion high-speed 4G Internet spectrum licence.
The amendment does not, however, benefit their rivals such as Safaricom #ticker:SCOM, Airtel and Telkom whose majority stakes are held by foreign investors.
“ … It is also noteworthy that there has been an overconcentration of spectrum resources by a few individuals creating an entry barrier to others …,” JTL said in the memoranda titled Competition in the telecommunications sector submitted to the National Assembly’s Departmental Committee on Communication, Information and Innovation last year.
“It is our view that the cost should be reviewed in the long-term but as a temporary measure, we propose a payment plan of the spectrum fees spread out over a ten (10)-year period at the very minimum,” JTL adds in the proposal.
The amendment sets other conditions investors must meet to be allowed to pay fees over a 10-year window to include construction of at least 500 base transceiver stations within three years of grant of the licence.
The amendment, likely to draw more cash-rich local investors to the industry, only applies to spectrum licence fees exceeding Sh1 billion.