The first negative fall-out from Kenya's game of "top-job musical chairs" became apparent this week. CCK's new D-G has shown that he retains the "protect-the-incumbent" mentality which his predecessor Kirui admitted took several years to lose.

Last week industry sources indicated that CCK Director-General John Waweru was planning to restrict the provision of the popular Internet telephone service that has drastically lowered international call rates to one provider – a stance he has maintained since his days at Telkom Kenya.

Waweru’s position, which stakeholders see as a reversal of the progress the telecom sector had made towards full liberalisation, sparked fresh fears that the regulator was determined to take the industry back to the days when State-owned Telkom Kenya enjoyed exclusivity in the provision of Internet services.

Sources at CCK indicated that Waweru had put on hold the issuance of licenses for VoIP providers pending a review of the rules governing the sector.

The Telecommunication Service Provider Association of Kenya (Tespok) expressed concern over the delay in release of the guidelines and questioned CCK’s commitment to full liberalisation of the VoIP market.

The association’s chairman Joseph Mucheru said members were concerned about on-goings at CCK. He accused the regulator of stifling the industry’s growth through frequent change of goal posts.

CCK, however, denied that it was backtracking on the reforms. Mr Mutua Muthusi, CCK’s Assistant Director in charge of public relations and communications said new guidelines will soon be introduced to facilitate business in the segment.

"In about a month’s time, we are going to have the guidelines. We have taken into consideration responses from various stakeholders so as to come up with something that will not police the operators but guide them in their operations," he said.

Muthusi said it was the CCK’s intention to seek industry consensus before implementing any licensing structures that could hurt licensed operators. "CCK does not believe in prescribing regulations on each and every activity of the industry. Rather it would be more appropriate for the players to develop self-regulating mechanisms in certain areas."

He said delay in release of the guidelines had been caused by CCK’s commitment to involving service providers in the formulation of rules within which they operate.

Since Waweru swapped places with Sammy Kirui, the then CCK Director-General, not much has taken place in the sector apart from last month’s consultative meeting with industry players. CCK’s changed strategy also threatens the legality of existing VoIP operators.

The process of legalising VoIP started off last year through radical market reforms that dismantled Telkom Kenya’s monopoly of the Internet service provision.

In December last year, CCK had declared VoIP legal and asked Internet Service Providers (ISP’s) to surrender their licenses for modification to allow them carry multimedia traffic. Licenses were then issued to Internet Backbone and Gateway Operators (IBGO) allowing them to carry VoIP in their networks.

Though IBGO operators were not allowed to sell the service directly to the end users, ISPs were given a go ahead to do so.

Before he was sent on compulsory leave and later deployed to Telkom Kenya, Kirui had also promised to release VoIP guidelines to regulate the market.

Last month, Waweru held a consultative meeting with industry players and promised to issue the VoIP guidelines during the National ICT Conference that was held in Mombasa later that month. That did not materialize.

The failure by Waweru to honour his promise left the operators, who have invested heavily in the business, at the crossroads with many of them wondering whether the telecommunications regulator was still committed to pursuing reforms that had been implemented in recent months.

Tespok also read mischief in the move by CCK to allow IBGOs to vend VoIP service, while denying retailers access to it.

"Backbone operators (IBGOs) are like wholesalers in this process, ISPs are the retailers who should sell the service to end users. As it is now the retailers cannot offer the service as CCK is holding onto their licenses," said Mucheru.

Until the CCK issues the amended licenses, the law bars ISPs from carrying VoIP traffic.

Mucheru said delay in release of the licences once again raised the question as to who should distribute the service to end-users?"

What has incensed Tespok most, however, is CCK’s reluctance to fast track reforms in the sector. The association views restriction of ISPs from carrying VoIP in their networks as a deliberate policy shift that is aimed at creating a lucrative black market.

"This is a service that the Kenyans badly need to reduce the cost of doing business in the country. Restricting the retail element therefore opens up vending through the black-market," said Mucheru.

While at Telkom Kenya, Waweru had disconnected ISP Kenya Limited’s high capacity line that the firm used to offer VoIP services.

Kirui, the managing director of Telkom Kenya, who was then at the helm of CCK had ordered Telkom Kenya to restore the line but the latter refused to abide by the directive.

Muthusi said the CCK wanted telecommunications operators to settle inter-connection agreement commercially without waiting for the regulator’s intervention.

"This should be handled through business negotiations in the best interests of the operators and consumers," he said. The regulator, said Muthusi, would only make a ruling if the parties fail to reach a consensus.

The near standoff between the industry and the regulator comes barely nine months after the CCK released a new licensing structure to guide the market in move to liberalise the telecommunications sector.