Mobile Phone Companies Face Fines Over Service Quality in Kenya

Telecoms

The telecommunications regulator has hit out at mobile telephony firms who criticised its recent quality report card and added that it will, from next year, levy penalties on operators who fail to meet quality standards.

The Communications Commission of Kenya (CCK) recently ranked Zain as the best among the four operators on the quality front, having complied with seven out of the eight parameters - a move that has irked Safaricom and Orange which were each in compliance with three parameters. Essar met four of the standards, while three operators have questioned the methodology used by the regulators arguing that it was not in compliance with international parameters. But CCK reckons that its measurements are in touch with global standards and challenged the operators to up their quality levels instead of complaining.

"This year, CCK has shared the report with the operators to assist them improve their performance. Going forward, CCK shall levy penalties for non-conformity with the set QoS (quality of service) as stipulated by the law," Charles Njoroge, director general at CCK, said in a statement on Friday.

The law allows the regulator to fine operators who fail to meet each of the quality standards Sh500,000. But the biggest threat to the operators is the publication of the report card given that quality of service is becoming a driver of market share in Kenya's increasingly competitive mobile telephony market.

And the regulator is not relenting on pushing the quality agenda. "We wish to assure consumers of ICT services that we shall continue carrying out the assessments on a yearly basis and publishing the arising QoS reports so that consumers can make informed choices in the market," added Mr Njoroge

With players almost matched on the pricing front, network quality is emerging as an arsenal for market share growth as the operators, including Zain, Orange, and Yu pour billions of shillings in network upgrades. This has triggered a fund raising cycle among operators worried of their strategic positioning and rushing to tap new investors with the financial muscle to fund the multi-billion shilling upgrade plans.

Safaricom has made a return to the bond market to raise Sh4.5 billion over the next two weeks for capital expenditures.

Airtel, formerly Zain, is seeking to spend Sh24 billion in the next 18 months on upgrading its network to the 3G platform and growing its distributorship channels, while Essar is also boosting its network.

Both firms have brought in new investors who are meeting part of the expansion bill, with Airtel counting on its parent company Bharti while Essar is bringing in new shareholders.