A long-running Sh2 billion licence dispute with mobile operator Airtel Kenya, in which the Communications Authority of Kenya (CA) and Treasury suffered a huge blow after a lengthy court battle, could have contributed to the early exit of embattled Director-General Francis Wangusi, the Nation has learnt.
Mr Wangusi, a long-serving executive of the telecoms regulator, was shown the door by the Authority’s board of directors on Friday. His tenure at the helm of the agency has been marked by controversy.
Mr Wangusi had been re-appointed the director-general of the Authority for a four-year term effective August 22, 2015.
He had been the boss since 2012, after serving in an acting capacity for a year.
Details now show the CA board’s chairman Ngene Kariuki met other members on Friday evening before issuing the matching orders, citing human resource concerns at the agency.
HUMAN RESOURCE CONCERNS
The board said investigations would be conducted to establish if there were “malpractices” in staff training and promotions at the Authority.
Information, Communication and Technology (ICT) Cabinet Secretary Joe Mucheru confirmed to the Sunday Nation that the Airtel issue was discussed by the board before the decision to kick out Mr Wangusi was arrived at.
“The board is investigating and so they are the ones with the full information on what they are doing. For me they just give a brief. They had their meeting and are yet to come and tell me how it went. But I know that in the board meeting, they were discussing the Airtel ruling so whether it forms part of the investigation is something they have to tell me. We are likely to meet (with the board) on Monday,” said Mr Mucheru.
In the case of the Airtel Kenya, it has emerged the CA did not seek counsel from the Office of the Attorney-General, as should have been the case, before delving into the complex legal tangle that it consequently lost to the telecoms company at the High Court.
In the case, sources told the Nation, the government was poorly represented in court and CA’s arguments were not as water tight and thus the State’s interests were compromised.
The High Court in December last year dismissed the case in which the Treasury was demanding licence fees through the communications regulator following the 2014 exit of Essar’s yuMobile from the Kenyan market.
The deal was valued at about $100 million (Sh10.3 billion) and saw Airtel acquire the 2.7-million yuMobile subscribers at a cost of $6.9 million (Sh710 million) while Safaricom took up the frequency and phone masts.
According to Airtel, CA had promised to merge its operating licence with that of yuMobile, with the deal granting Airtel a lease to operate in the country until January 2025.
A few months later, however, CA wrote to Airtel demanding that the telco pay up Sh2 billion to renew its operating spectrum licence. CA said the National Treasury had insisted the Sh2 billion payment be made since licence fees were a matter of public revenue and only Treasury could grant waivers.
The High Court upheld Airtel’s view, saying the Treasury erred in demanding the fees despite an existing agreement between the telco and CA.
“The Treasury has no power to direct the respondent on how to carry out its mandate,” said Justice George Odunga in that ruling.
“By permitting the Treasury to do so, I find that the respondent did abdicate its duty,” the Judge said.
The court further said the need to raise revenue was no justification for CA and Treasury to flout an agreement made with Airtel.
“The respondent’s decision to demand the applicant pay $20 million, though attractive in terms of enhanced public revenue and perhaps for the zeal of meeting annual tax targets, I find is not such an overriding interest for the reasons set out in this judgment,” said Justice Odunga.
Consequently, the government was denied much needed funds at a time the National Treasury was struggling to raise money for expenditure.
In another controversial case marking his tenure, the CA denied claims it had awarded Jamii Telecoms, a tier 2 telecommunications firm, a licence and coveted spectrum to operate another mobile phone service at a throw- away fee.
The award was seen by some speculators as a “gift”, and other companies operating in Kenya protested. saying the fee, alleged to be Sh100,000, was meagre, compared to more than Sh5 billion they had to pay before being allowed to roll out their services.
The CA would, however, take a defensive stance against the allegations.
The regulator at the time claimed the deal was above board, denying that it could potentially cost taxpayers billions of shillings in unpaid licence fees.
CA further faced criticism that it failed in mobile number portability programme which. if successful, would have made it easy for users to migrate from one provider to another while retaining their unique cell phone numbers.
The authority was also at a crossroads with service providers over installation of the Device Management System (DMS).
The system required providers to install a gadget on their networks but opponents claimed it would have allowed authorities unlimited access to users’ private conversations.
Mobile companies saw it as a means to listen in, read and track down activities of the tens of millions of Kenyans who have access to mobile devices.
On its part, the CA argued that the system was meant to crack down on illegal mobile devices operating in the market and would not infringe on consumers’ privacy.
The CA hoped to make it work by incorporating a third party to handle the system.
Broadband Communications was awarded the contract to install the system and was said to have been working with a Lebanese company – Invigo Off-Shore Sal.
A court ordered CA to suspend the system.
The contentious digital migration saw him clash with media houses who protested the move.
In court battles, Mr Wangusi was accused of denying Kenyans their right to information by shutting down three leading television stations – NTV, KTN and Citizen TV – which were fighting for more time to acquire and distribute their digital broadcasting equipment.
And prior to the August 8 General Election, Mr Wangusi warned media houses against relaying parallel transmission of results.
He maintained that only the Independent Electoral and Boundaries Commission was mandated to announce election results.
“Some media houses have threatened to transmit parallel results, but let them have this message clear that we are the watchdogs and we shall not allow it. There is only one body that can transmit election results, and that is the IEBC,” he warned at the time.
In another controversial move, Mr wangusi also warned broadcasters in November last year not to show live the violent confrontations between supporters of Mr Raila Odinga, who was returning from the US, and the police. The directive was largely disregarded.