The awarding of licence to Jamii Telecom was legal: CA

Thursday May 11 2017

Jamii Telecom chairman Joshua Chepkwony

Jamii Telecom chairman Joshua Chepkwony (right) and Kass Limited chief executive Julius Lamaon address a media briefing in Upper Hill, Nairobi, on May 11, 2017. Jamii Telecom said that it is planning to launch commercial trials this quarter. PHOTO | SALATON NJAU | NATION MEDIA GROUP 

By MUTHOKI MUMO
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In what has turned out to be a fight within, and for, the multi-billion shilling telecom industry, Jamii Telecom, the company at the center of a controversial mobile licence, now blames the big three operators as the ones behind the Daily Nation exposé yesterday.

The big three are Safaricom, Airtel and Telkom.

While the communication sector regulator — the Communications Authority — took a defensive stance against allegations that it has irregularly awarded Jamii Telecom a licence to provide mobile services, and as a result losing billions of taxpayer shillings in the process, the Jamii Telecom chairman, Joshua K. Chepkwony, said the Daily Nation story was “the product of machinations and intrigues by dominant actors in the telecommunication industry who are keen on protecting their monopolistic dominance.”

“We must state from the onset that we have no doubt that the report is not a product of objective journalistic investigations and reporting,” Mr Chepkwony said.

TRIAL LICENCE
But yesterday, the Communications Authority failed to shed any light on how it gave what is considered as a finite public resource to a private company. It promised to issue a “substantive statement” in due course.

In a brief press conference, the CA said that the issuance of the coveted mobile service licence to Jamii was above board.

“Contrary to what appeared in the media today, the Authority wishes to clarify that no money has been lost in the authorisation given to Jamii Telecom,” CA chairman Ngene Gituku said.

Mr Gituku confirmed that Jamii Telecom had in September last year been granted a trial licence to offer mobile phone services on the 700 Megahertz spectrum — left up for grabs after the digital migration.

IRREGULAR AWARDING
Industry players had risen in protest, claiming that the regulator, in assigning the frequency to Jamii Telecom, was reneging on earlier promises to publicly auction the spectrum.

In addition, they’ve raised concerns that Jamii Telecom did not pay the Sh2.5 billion ($25 million) fee as required by the law.

“We don’t understand how the best quality spectrum could be allocated in a process that hasn’t been shared with the operators,” Safaricom chief executive, Mr Bob Collymore, said on Wednesday.

In his letter to Mr Wangusi, Telkom CEO, Aldo Mareuse, had questioned how a tier two company, which he said pays an operating licence of Sh100,000 for the grant of an operating licence, can be given a service also provided by tier 1 companies, which pay upward of $25 million.

But in his rejoinder, Mr Chepkwony said he pays Sh15 million like other tier 1 operators. “Therefore, the stated Sh100,000… is a false and malicious.”

ENDING DOMINANCE
Jamii Telecom operates the Faiba brand.

Mr Chepkwony said it had followed CA processes in applying for the licence, claiming that Jamii’s mode of entry into the mobile services market was nothing but clean.

“We are very determined to make sure we penetrate this market. We want to make sure Kenyans have choices in terms of accessing telecommunications services.

"And you cannot have that if a few operators are dominating the market,” he said.

The company pointed out that other players have trialled new frequencies without paying licence fees and said that it was planning to pay up the Sh2.5 billion at the end of the trial period in compliance with its agreement with the CA.

PAY FEES

Market leader Safaricom did not pay its 4G spectrum licence fee until January this year although it had piloted services on the band for months.

Airtel and Telkom Kenya were also given 4G spectrum on a pilot basis although neither have launched 4G services.

They have not yet paid the fees, according to CA Director General Francis Wangusi.

Jamii Telecom said that it is planning to launch commercial trials this quarter and has already invested Sh5.1 billion in network infrastructure.