[kictanet] [***SPAM*** Score/Req: 05.50/5.0] Airtel’s Sh2.1bn licence renewal fee splits CA board

[Consumers Federation of Kenya (COFEK)]

There is a major governance problem with CA board.  The CA Director General is equally disappointing on the manner he has handled the Airtel license matter, to say the least.  It is the reason COFEK released this statement earlier today: 

 

http://www.cofek.co.ke/index.php/news-and-media/1422-let-communications-authority-shape-up-or-be-disbanded

 

Best wishes

www.cofek.co.ke <http://www.cofek.co.ke>  

 

From: kictanet [mailto:kictanet-bounces+hotline=cofek.co.ke at lists.kictanet.or.ke] On Behalf Of Mwendwa Kivuva via kictanet
Sent: Monday, October 5, 2015 8:12 PM
To: The Consumers Federation of Kenya (Cofek) <hotline at cofek.co.ke>
Cc: Mwendwa Kivuva <Kivuva at transworldafrica.com>
Subject: [***SPAM*** Score/Req: 05.50/5.0] [kictanet] Airtel’s Sh2.1bn licence renewal fee splits CA board

 

http://www.businessdailyafrica.com/Corporate-News/Airtel-Sh2-1bn-licence-renewal-fee-splits-CA-board/-/539550/2894480/-/vvpw8s/-/index.html

Matters came to a head during the CA’s board meetings held on Monday and Tuesday last week after the Treasury and a number of non-executive board members insisted that Airtel must pay the Sh2.1 billion fee for the licence.

Telecommunications firm Airtel’s quest to get its frequency licence renewed without paying the required Sh2.1 billion fee has split the Communication Authority Kenya (CA) board, adding a new dimension to the seven months battle to get Kenya’s second-largest operator on a firm footing in the market.  
Francis Wangusi, the CA director-general, sparked the controversy with a letter he wrote to the authority’s board advising withdrawal of a demand notice the authority had sent to Airtel asking for payment of the Sh2.1 billion fee.

The advisory marked an about-turn by Mr Wangusi, who had previously insisted that Airtel pays Sh2.1 billion for a 10-year frequency spectrum licence following the expiry in February of the one it was awarded in 2000. Airtel paid a $55 million (Sh4.7 billion) fee for its initial 15-year licence.

Matters came to a head during the CA’s board meetings held on Monday and Tuesday last week after the Treasury and a number of non-executive board members insisted that Airtel must pay the Sh2.1 billion fee for the licence.

Mr Wangusi’s position is supported by CA chairman Ben Gituku and Joseph Tiampati, the principal secretary in the Ministry of Information and Communication.

Mr Wangusi reckons that the authority’s pursuit of the frequency spectrum fee from Airtel may expose the agency to court battles it stands a high chance of losing.

This, he says, is because the authority did not include the settling of initial frequency spectrum licence fees in the conditions it set for Airtel when the telecoms operator was acquiring Essar Telecom’s properties.

“Management is of the view that considering the events that have taken place thus so far based on the legal analysis, it would be more prudent to withdraw the demand for $20,025,000 from Airtel,” Mr Wangusi said in his note to the board.

If adopted, Mr Wangusi’s advisory would deny the Treasury the Sh2.1 billion it was expecting from the deal at a time when the government is in dire need of cash to meet the ever rising expenditure demands.

Safaricom <http://www.businessdailyafrica.com/stocks/-/1322440/1394278/-/shkse6/-/index.html>  last year paid Sh2.3 billion to have its licence renewed — an amount that was pegged on the Sh2.3 billion yuMobile paid in 2003 to enter Kenya as the fourth mobile operator.




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