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Telcos face higher fees as regulator seeks Sh4bn to fund tech services
What you need to know:
- Communications Authority of Kenya Francis Wangusi told Saturday Nation that the regulator was reviewing the law that governs the fund with a view to increase the target collections from the current Sh2.5 billion to Sh4 billion.
- Initially, the regulator had proposed that firm contribute one per cent of their annual revenues to the fund but the rate was cut to 0.5 per cent after facing resistance by the private sector.
- Telecommunications Service Providers of Kenya last month demanded that the regulator audits the fund.
Telecommunication firms could soon be forced to contribute more towards a fund set up to finance provision of Information Communication Technology services in areas that are considered economically unattractive.
Communications Authority of Kenya Francis Wangusi told Saturday Nation that the regulator was reviewing the law that governs the fund with a view to increase the target collections from the current Sh2.5 billion to Sh4 billion.
The move is likely to put the regulator at loggerheads with companies, who have in the past expressed discontentment in how the fund is managed.
“The new framework is being finalised and will be exposed to all stakeholders for consultations. By the end of the year, the fund’s target collections will be pushed to Sh4 billion,” said Mr Wangusi.
Currently, the regulator receives 0.5 per cent of the annual gross revenue of each telco.
The watchdog has been working with a target of raising Sh2 billion a year. With a fresh target of Sh4 billion, the regulator may require the firms to contribute more than they currently do.
Initially, the regulator had proposed that firm contribute one per cent of their annual revenues to the fund but the rate was cut to 0.5 per cent after facing resistance by the private sector.
Mr Wangusi said that with the current contributions, it might take the country up to 27 years to close the existing ICT access gaps.
The tax is applicable to all licensees in the information and communications industry including mobile phone companies, broadcasters, Internet service providers and postal/courier service entities.
Last year, telcos raised about Sh3 billion, surpassing the Sh2.5 billion target. The money has, however, not been put to use and some of the contentious issues raised by the firms are yet to be addressed.
Telecommunications Service Providers of Kenya last month demanded that the regulator audits the fund.
“We have not yet been updated on the issue of having private auditors for this fund including the status of a new access gap study,” Tespok chief executive Fiona Asonga said on Wednesday.
“We urge the authority to adequately address the pending issues raised before they start administering this fund.”
Mr Wangusi said the proposed amendment would subject the fund to annual audits and allow the involvement of telcos in managing it.
