Safaricom faces Sh449m fine for failing to connect small firms

Kenya's largest telecoms operator Safaricom #ticker:SCOM faces a fine of 0.2 per cent of its gross revenue for the last financial year, equivalent to Sh449 million ($4.47 million), documents from the regulator reviewed by Reuters showed.

The Communications Authority of Kenya imposed the fine on the company, part-owned by South Africa’s Vodacom and Britain’s Vodafone, for failing to connect smaller firms.

Safaricom denies the accusation and has secured a temporary suspension of the fine pending a hearing before an industry tribunal, the documents showed.

If confirmed, the fine would be the largest ever imposed by Kenya’s telecoms regulator.

The regulator said in a letter to Safaricom, reviewed by Reuters, that it had received complaints from a rival, Elige Communications Ltd, that Safaricom was blocking calls to its network.

No explanation

The regulator also said Safaricom had failed to offer any explanation when asked about the complaint.

“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,” Communications Authority of Kenya said in the letter, dated Aug 1.

In a letter of reply by Safaricom two days later, also reviewed by Reuters, the company said it had complied with all directives from the regulator, and 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,” Safaricom wrote.

Elige Communications was not available immediately for a comment on Monday. Safaricom declined to comment.

Safaricom’s shares dropped 1.8 per cent to Sh27.75 after news of the fine.