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Telcos face stiffer fines over quality

Saturday December 22 2012
telcos

Kenya's Information and Communication ministry plans to raise the fines, saying the current penalty is too lenient. It's following in the footsteps of Nigeria and Rwanda, which introduced hefty fines against telecommunication companies that failed to meet quality checks. Photo/FILE

Kenya is seeking heavier penalties against mobile phone operators who fail to meet standards set by the communication regulator.

The Communications Commission of Kenya (CCK) found that Safaricom and Airtel failed to meet minimum standards with regard to quality of service in the year to June and declared smaller rivals, Telkom Orange and Essar Telecom, compliant.

The operators are currently fined Ksh500,000 ($5,805) for breach of standards in service provision. The Ministry of Information and Communication plans to raise the fines, saying the current penalty is too lenient.

“We need to review the policy so that operators take the matter of quality more seriously,” said the Permanent Secretary in the Ministry of Information and Communications Dr Bitange Ndemo, adding that the $5,805 fine is insignificant for firms with annual revenues of tens of billions of shillings.

Kenya is following in the footsteps of Nigeria and Rwanda, which introduced hefty fines against telecommunication companies that failed to meet quality checks.

READ: MTN fined over low quality services

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In May, Nigeria fined four telecom companies a combined $7.4 million for failing to meet minimum service standards.

Revoked licences

Last year, Rwanda revoked the license of Rwandatel for poor service and slapped MTN Group a daily fine of $4,000.

READ: Rura puts MTN, Tigo on notice over poor services

In Kenya, the quality assessment is in its third year and is based on eight indicators.

These are completion of calls, success of calls set-up, the call set-up time, call drop rates, blocked calls tendencies, speech quality, handover success rate and the strength of the received signals.

According to CCK, the operators are supposed to meet seven out of the eight quality benchmarks.

The latest CCK quality report highlighted the correlation between a poor score and the number of subscribers in a network.

“This seems to be the case for Safaricom and Airtel, whose compliance levels tend to be erratic in areas where they have a high subscriber base such as Nairobi and Central, leading to poor quality and non-compliance,” read part of report released on Friday.

Safaricom has a big lead over rivals with a subscriber base of 19 million in June from 16.2 million in 2010, but its network has been struggling with fluctuating data speeds and dropped calls.

The number two player, Airtel, has more than doubled its subscriber base since 2010 to 4.9 million from 1.83 million but has slipped on the quality ranking from last year’s 75 per cent and to 62.5 per cent.

Worst performers

Airtel together with Safaricom were rated poor in completing calls countrywide, according to the CCK.

The call completion parameter measures the number of calls that are connected satisfactorily compared with the total number of attempts callers made.

Safaricom also had the highest blocked calls rate while the other three were compliant. None of the operators met the required quality of speech.

“We have issues with quality of our network in urban areas, especially in Nairobi where we experience dropped calls,” said Bob Collymore, the CEO of Safaricom, adding that the firm has lined up funds to upgrade its network.

Its rivals have also announced plans to capture the surge in demand for data services and boost voice quality.

“We inherited a 10-year-old network which the previous owners had not upgraded and this has affected our plan for rolling out products such as the 3G network,” said Airtel Kenya managing director Shivan Bhargava said last week as he announced a Ksh8 billion ($95 million) upgrade plan.

India’s Bharti Airtel bought a 95 per cent stake in the Kenyan unit in mid-2010.

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