**Updated post**
A special issue of the Kenya Gazette notice number 2431, of The Kenya Communications Act (No.2 of 1998), dated 31 March 2006 set outs the ICT legislative policy environment for the Kenya Information and Communications Bill- 2006, now with the Attorney General pending publishing, discussion and passage in Parliament, and Presidential accent
The published "Information and Communications Technology Sector Policy Guidelines aim to, inter alia, create a new-look Communications Commission of Kenya -a converged Regulator for the entire ICT sector, including broadcasting under a new regulation framework in the converging and competitive environment, and also to manage a universal service fund established to finance ICTs in rural areas and under-served segments.
The Fund will be financed by the operators providing services in the various market segments.
Investors, operators and service providers are expected to participate in the provision of universal service/access; develop a sector with efficiency, credibility, commercial integrity and good corporate governance; provide quality and sustainable service with pluralism of choice to consumers; and keep abreast with and participate in ICTs both regionally internationally.
With the increasing and competing demands for spectrum; market principles will be applied to promote effective use of the radio frequency spectrum, however the Government will ensure that spectrum fees does not become a burden to operators.
Regulations being developed will ensure that telecommunications and networks are robust, resilient, and have adequate security, redundancy and backup arrangements on critical components of the national infrastructure.
Consumers are now legally empowered to demand universally available, affordable, quality services from service providers and to review government consumer-protection policies along
technological changes and consumer trends.
Unlike in the Kenya Communications Act, still in force, where the term "consumer" is mentioned just once, seemingly in passing, in sections 23 and 47, "consumer" and "user" are now mentioned 8 and 18 times respectively in the published policy.
On privacy, for example, fundamental human rights relating to telemedicine and use of IT in health delivery, the government will provide IT facilities in all public health facilities; IT training
to medical staff; set standards and norms for IT in the healthcare system; and legislation governing telemedicine and health information; and establishment of national resource centres
for IT in healthcare.
Diverse stakeholder interests groups are frustrated with the slow enactment process, some even suggesting to demonstrate to the Attorney General offices to demand publishing of this inclusive, non-contentious draft law concluded in June 2005 at Mombasa.
Alex Gakuru
Saturday, March 31, 2007
Thursday, March 29, 2007
Focus on Internet Users
[Kenya Broadcasting Corporation]
CCK to keep track of internet users
Written By:Stanley Wabomba , Posted: Wed, Mar 28, 2007
Internet service providers are required to submit duly completed information return forms to the Communications Commission of Kenya- CCK after every three months.
CCK director general John Waweru says it is mandatory for the providers to submit the forms detailing how many new Internet users have joined and those who have left their networks.
The information is essential to maintain an up-to-date ICT database in the country.
Speaking at an Internet market study workshop in Nairobi, Waweru said lack of up-to-date information has created a scenario where Western experts estimate the facts. They often end up with gross under-estimation and mis-representation of facts.
The Internet market study established that Internet service providers in the country exploit consumers by inflating the cost by more than double what they are supposed to charge.
Although there are 51 licensed Internet providers, Internet service is only available in 20 out of the over 70 districts.
Nairobi and the Coast have 90 percent of the country's Internet users, which prompted CCK to urge providers to expand coverage to rural areas and narrow the information technology gap.
----------------------------------
[East African Standard]
CCK urges more Internet access
By James Ratemo and Edith Fortunate
Published 29 March, 2007
The Government has promised to expand Internet infrastructure.
Communications Commission of Kenya Director General, Mr John Waweru, says low uptake of the Internet poses the risk of Kenya lagging behind in reaping the benefits from the fast evolving digital economy.
Waweru was speaking in Nairobi when he received a CCK-commissioned study that found there are more than 2.7 million Internet users in the country. This figure is in contrast to an earlier International Telecommunications Union’s estimate of only 1.5 million.
Nairobi Province has the highest concentration, taking over 80 per cent of the Internet users followed by Coast at a paltry 9.4 per cent.
A local ICT and management consultancy firm in Nairobi, Netcom Information Systems, Conducted the study — Internet Market Study — from last October.
There are more than 50 Internet service providers (ISPs), 20 public data network operators, six Internet back-bone and gateway operators and over 20 local loop operators.
Only about 20 per cent of the users are spread in the small towns, the study says.
Releasing the report, Netcom Director, Prof Timothy Mwololo, said the cost of bandwidth and leased-line tariffs had remained high despite liberalisation of the sub-sector.
The study recommends licensing of more ISPs to provide Internet access and switching services.
---------------------------
[Business Daily Africa]
Middlemen hike internet costs, study shows
By Okuttah Mark Published 29 March, 2007
A study on the penetration of Internet services in Kenya has recommended that the communications authority slash the number of intermediate operators in online services.
The study commissioned by the Communications Commission of Kenya (CCK) last year found Internet access has remained elusive to most Kenyans, primarily because of high charges
Timothy Waema, the lead consultant with Netcom Information Systems Limited, which conducted the study for CCK, said multiple layers of middlemen increase the price of the bandwidth, which is eventually felt at the end user level. “The cost of two megabits per second (Mbps) of bandwidth at the international level goes for $2,000, but when it reaches the Internet service provider level (in Kenya) and the cost is $5,700 this is later passed to consumers” he said.
According to the study, the hierarchy of Internet provision services starts with global Internet providers, then on to international backbone and gateway operators (IBGOs) then to the country ISPs, and lastly to consumers.
Prices will increase down the chain, but the study found the final charges can be minimised by cutting out the IBGOs. The extra players could also be hurting the quality of the data transmission as well.
The study also showed that Internet users have grown in Kenya over the past give years to reach 2.7 million.
CCK to keep track of internet users
Written By:Stanley Wabomba , Posted: Wed, Mar 28, 2007
Internet service providers are required to submit duly completed information return forms to the Communications Commission of Kenya- CCK after every three months.
CCK director general John Waweru says it is mandatory for the providers to submit the forms detailing how many new Internet users have joined and those who have left their networks.
The information is essential to maintain an up-to-date ICT database in the country.
Speaking at an Internet market study workshop in Nairobi, Waweru said lack of up-to-date information has created a scenario where Western experts estimate the facts. They often end up with gross under-estimation and mis-representation of facts.
The Internet market study established that Internet service providers in the country exploit consumers by inflating the cost by more than double what they are supposed to charge.
Although there are 51 licensed Internet providers, Internet service is only available in 20 out of the over 70 districts.
Nairobi and the Coast have 90 percent of the country's Internet users, which prompted CCK to urge providers to expand coverage to rural areas and narrow the information technology gap.
----------------------------------
[East African Standard]
CCK urges more Internet access
By James Ratemo and Edith Fortunate
Published 29 March, 2007
The Government has promised to expand Internet infrastructure.
Communications Commission of Kenya Director General, Mr John Waweru, says low uptake of the Internet poses the risk of Kenya lagging behind in reaping the benefits from the fast evolving digital economy.
Waweru was speaking in Nairobi when he received a CCK-commissioned study that found there are more than 2.7 million Internet users in the country. This figure is in contrast to an earlier International Telecommunications Union’s estimate of only 1.5 million.
Nairobi Province has the highest concentration, taking over 80 per cent of the Internet users followed by Coast at a paltry 9.4 per cent.
A local ICT and management consultancy firm in Nairobi, Netcom Information Systems, Conducted the study — Internet Market Study — from last October.
There are more than 50 Internet service providers (ISPs), 20 public data network operators, six Internet back-bone and gateway operators and over 20 local loop operators.
Only about 20 per cent of the users are spread in the small towns, the study says.
Releasing the report, Netcom Director, Prof Timothy Mwololo, said the cost of bandwidth and leased-line tariffs had remained high despite liberalisation of the sub-sector.
The study recommends licensing of more ISPs to provide Internet access and switching services.
---------------------------
[Business Daily Africa]
Middlemen hike internet costs, study shows
By Okuttah Mark Published 29 March, 2007
A study on the penetration of Internet services in Kenya has recommended that the communications authority slash the number of intermediate operators in online services.
The study commissioned by the Communications Commission of Kenya (CCK) last year found Internet access has remained elusive to most Kenyans, primarily because of high charges
Timothy Waema, the lead consultant with Netcom Information Systems Limited, which conducted the study for CCK, said multiple layers of middlemen increase the price of the bandwidth, which is eventually felt at the end user level. “The cost of two megabits per second (Mbps) of bandwidth at the international level goes for $2,000, but when it reaches the Internet service provider level (in Kenya) and the cost is $5,700 this is later passed to consumers” he said.
According to the study, the hierarchy of Internet provision services starts with global Internet providers, then on to international backbone and gateway operators (IBGOs) then to the country ISPs, and lastly to consumers.
Prices will increase down the chain, but the study found the final charges can be minimised by cutting out the IBGOs. The extra players could also be hurting the quality of the data transmission as well.
The study also showed that Internet users have grown in Kenya over the past give years to reach 2.7 million.
Door opens for new non-profit telecom firms
[Business Daily Africa]
By Okuttah Mark
28 March, 2007
Licence-free band spectrum, courtesy of the airwaves’ regulator, could allow non-profit organisations to own and operate telecom companies.
The Communication Commission of Kenya’s offer of the ISM Band 2.4 and 5.8 spectrum to registered community groups is on a first-come-first-served basis, and already organisations from Mukurweini, Khwisero, Limuru and Rangwe have expressed interest. Countries like Tanzania, Namibia, Bangladesh and India have used the concept of free frequencies in efforts to bridge the ‘digital divide’ with the West.
Alex Gakuru, of the ICT Consumers Association of Kenya (ICAK) , hailed the move by the CCK. He said it will enable those in far flung areas to manage their information systems without waiting for operators who might not see a good business case for moving into those areas.
“Telecommunication companies have failed consumers on liberalisation promises of cheaper, better and widespread services,” said Mr Gakuru. In 1999, placing a one minute call through Telkom Kenya network was just Sh1, while now after sector liberalisation it stands at seven shillings, he said.
Through his association, Mr Gakuru is advocating for the cause of community owned telecoms. He said now most customers have little input into the products and services being offered by the telecommunication companies.
As demand for ICT services rise so does price. Consumers are bombarded with products and services that don’t fit their communication needs. For example, the wireless data transfer service known as General Packet Radio Service (GPRS), which failed to take off despite promising speeds of up to 115Kbits per second.
“In the current situation ICTs cause more poverty than prosperity. It is cheaper to board a matatu, take a 10megabits file than attempt to upload via email at 32 kilobits per second,” he said.
To Mr Gakuru, the best way to protect consumers is to allow them to own their own telecom companies.
In Khwisero, the constituents have placed communications at the top of their needs and through the Constituency Development Fund (CDF), they have put a proposal to spare between Sh3 million-Sh5 million for connecting the area with fibre and deploying wireless networks.
The community intends to use Wifi enabled mobile phones to access both voice and data communication.
In Rangwe, there are plans by the constituents to connect the area with fibre over electric cables.
Although ICTs future is still bright, only companies who have user centric models will survive, points Gakuru.
Door opens for new non-profit telecom firms
By Okuttah Mark
28 March, 2007
Licence-free band spectrum, courtesy of the airwaves’ regulator, could allow non-profit organisations to own and operate telecom companies.
The Communication Commission of Kenya’s offer of the ISM Band 2.4 and 5.8 spectrum to registered community groups is on a first-come-first-served basis, and already organisations from Mukurweini, Khwisero, Limuru and Rangwe have expressed interest. Countries like Tanzania, Namibia, Bangladesh and India have used the concept of free frequencies in efforts to bridge the ‘digital divide’ with the West.
Alex Gakuru, of the ICT Consumers Association of Kenya (ICAK) , hailed the move by the CCK. He said it will enable those in far flung areas to manage their information systems without waiting for operators who might not see a good business case for moving into those areas.
“Telecommunication companies have failed consumers on liberalisation promises of cheaper, better and widespread services,” said Mr Gakuru. In 1999, placing a one minute call through Telkom Kenya network was just Sh1, while now after sector liberalisation it stands at seven shillings, he said.
Through his association, Mr Gakuru is advocating for the cause of community owned telecoms. He said now most customers have little input into the products and services being offered by the telecommunication companies.
As demand for ICT services rise so does price. Consumers are bombarded with products and services that don’t fit their communication needs. For example, the wireless data transfer service known as General Packet Radio Service (GPRS), which failed to take off despite promising speeds of up to 115Kbits per second.
“In the current situation ICTs cause more poverty than prosperity. It is cheaper to board a matatu, take a 10megabits file than attempt to upload via email at 32 kilobits per second,” he said.
To Mr Gakuru, the best way to protect consumers is to allow them to own their own telecom companies.
In Khwisero, the constituents have placed communications at the top of their needs and through the Constituency Development Fund (CDF), they have put a proposal to spare between Sh3 million-Sh5 million for connecting the area with fibre and deploying wireless networks.
The community intends to use Wifi enabled mobile phones to access both voice and data communication.
In Rangwe, there are plans by the constituents to connect the area with fibre over electric cables.
Although ICTs future is still bright, only companies who have user centric models will survive, points Gakuru.
Door opens for new non-profit telecom firms
Sunday, March 25, 2007
Hefty missed opportunity as State fails to seal deal
[The Daily Nation]
Story by JAINDI KISERO
Publication Date: 3/21/2007
Just the other day, a group of Arab investors led by V-Tel Communications of Dubai came here and offered to pay the Government a whopping Sh12 billion($169million) for a licence to operate both a fixed line and mobile telecommunications services.
V-Tel Communications partnered with Palestine’s PalTel as a technical partner.
To prove their seriousness, the Arab investors had gone to the extent of sending to the Government bank statements showing that they, indeed, had the money for the licence fee.
But as it turned out, the Government refused to accept the money, citing a disagreement between the Arabs and their local partners, and arguing that it risked exposing itself to endless litigation.
Basically, the deal collapsed because we have a law, which stipulates that any foreign investor putting his money in the telecommunications sector must sell 30 per cent of the shareholding of the business to locals.
The deal fell through because V-Tel’s local partners could not raise their share of the equity.
KENYA, THEREFORE, MISSED WHAT would have been the single largest foreign direct investment (FDI) in decades.
With the Arab investors out of the way, we offered the same licence to Indian investors at the price the Arabs had agreed to pay. Led by the Reliance group — one of India’s largest conglomerates — the Indians immediately went into negotiations with the Government for the lucrative licence.
After six weeks of negotiations, the Government last week announced that the deal with the Indians had flopped.
A story in the current issue of The EastAfrican says, the Indians — unlike the Arab investors — started making too many fresh demands and privileges on the Kenya government. The story narrates how the Indians had made it clear to the Government that they were not prepared to cough up Sh12 billion without commitment on several privileges, including zero import duties on telecommunications equipment, zero Value-Added Tax and sharing infrastructure with the existing mobile firms. If you want details on the excessive privileges the Indians demanded, grab a copy of the current issue of The EastAfrican.
Suffice to say negotiations flopped. The Government now says that it will put the market on the block again and invite fresh bids.
What is the way forward? In my view, this is the best opportunity for the Government to scrap the 30 per cent-local-shareholding rule. If you re-tender without repealing this rule, the next tender will also fail.
All that this rule does is to make it possible for the political elite to armtwist foreign investors to give them shares free of charge.
Whether it is Kenya, Tanzania, Uganda or any other African country auctioning a telecommunications licence, the local investors who will partner with the foreign investor will be politically-well-connected types: cronies of the President, a stalwart of the ruling party or a prominent businessman with tight connections with the ruling elite.
I am not against affirmative action in the allocation of shares to locals in new telecommunications companies. Indeed, no country has ever developed without having nurtured its own local and strong domestic capitalist class.
But what we are dealing with here is a parasitic class that insists on being given shares without having to pay for them. Whenever they are unable to raise the money either to pay for performance bonds or to subscribe for the equity, the locals will be the first to go to court to block the rolling out the investment.
Econet Wireless has been in the High Court of Kenya for years because of protracted legal disputes with its local partners.
At the end of the day, it is the ordinary consumer of telecommunications services that has suffered. Were it not for the machinations of these locals, Kenya would by now be having multiple providers of telephone services working side by side and competing in terms of both quality of services and prices.
We have to make up our minds whether what we want from these telecommunications companies is ownership of these firms by locals per se, or efficient services and low consumer prices for the ordinary user.
Fortunately for the Ministry of Information and Communications, scrapping the 30 per cent local shareholding rule should not be that difficult. Because the rule is part of subsidiary legislation, a mere notice in the official gazette by Information minister Mutahi Kagwe will do.
THE INFORMATION AND communications sector in Kenya is on a roller coaster, growing very rapidly. Total subscriber numbers for mobile phones hit a new peak of 7.1 million in October last year. Today, we are talking about a penetration rate of around 20 per cent.
Even the sick state-owned Telkom Kenya has been very active lately, cleaning its balance sheet, retrenching staff, while aggressively rolling out a CDMA fixed-wireless network in several towns.
Should we slow down the momentum merely to protect the interests of well-connected locals who won’t allow projects to roll out unless they are allowed to own shares in up-coming firms?
The Daily Nation Story by JAINDI KISERO
Story by JAINDI KISERO
Publication Date: 3/21/2007
Just the other day, a group of Arab investors led by V-Tel Communications of Dubai came here and offered to pay the Government a whopping Sh12 billion($169million) for a licence to operate both a fixed line and mobile telecommunications services.
V-Tel Communications partnered with Palestine’s PalTel as a technical partner.
To prove their seriousness, the Arab investors had gone to the extent of sending to the Government bank statements showing that they, indeed, had the money for the licence fee.
But as it turned out, the Government refused to accept the money, citing a disagreement between the Arabs and their local partners, and arguing that it risked exposing itself to endless litigation.
Basically, the deal collapsed because we have a law, which stipulates that any foreign investor putting his money in the telecommunications sector must sell 30 per cent of the shareholding of the business to locals.
The deal fell through because V-Tel’s local partners could not raise their share of the equity.
KENYA, THEREFORE, MISSED WHAT would have been the single largest foreign direct investment (FDI) in decades.
With the Arab investors out of the way, we offered the same licence to Indian investors at the price the Arabs had agreed to pay. Led by the Reliance group — one of India’s largest conglomerates — the Indians immediately went into negotiations with the Government for the lucrative licence.
After six weeks of negotiations, the Government last week announced that the deal with the Indians had flopped.
A story in the current issue of The EastAfrican says, the Indians — unlike the Arab investors — started making too many fresh demands and privileges on the Kenya government. The story narrates how the Indians had made it clear to the Government that they were not prepared to cough up Sh12 billion without commitment on several privileges, including zero import duties on telecommunications equipment, zero Value-Added Tax and sharing infrastructure with the existing mobile firms. If you want details on the excessive privileges the Indians demanded, grab a copy of the current issue of The EastAfrican.
Suffice to say negotiations flopped. The Government now says that it will put the market on the block again and invite fresh bids.
What is the way forward? In my view, this is the best opportunity for the Government to scrap the 30 per cent-local-shareholding rule. If you re-tender without repealing this rule, the next tender will also fail.
All that this rule does is to make it possible for the political elite to armtwist foreign investors to give them shares free of charge.
Whether it is Kenya, Tanzania, Uganda or any other African country auctioning a telecommunications licence, the local investors who will partner with the foreign investor will be politically-well-connected types: cronies of the President, a stalwart of the ruling party or a prominent businessman with tight connections with the ruling elite.
I am not against affirmative action in the allocation of shares to locals in new telecommunications companies. Indeed, no country has ever developed without having nurtured its own local and strong domestic capitalist class.
But what we are dealing with here is a parasitic class that insists on being given shares without having to pay for them. Whenever they are unable to raise the money either to pay for performance bonds or to subscribe for the equity, the locals will be the first to go to court to block the rolling out the investment.
Econet Wireless has been in the High Court of Kenya for years because of protracted legal disputes with its local partners.
At the end of the day, it is the ordinary consumer of telecommunications services that has suffered. Were it not for the machinations of these locals, Kenya would by now be having multiple providers of telephone services working side by side and competing in terms of both quality of services and prices.
We have to make up our minds whether what we want from these telecommunications companies is ownership of these firms by locals per se, or efficient services and low consumer prices for the ordinary user.
Fortunately for the Ministry of Information and Communications, scrapping the 30 per cent local shareholding rule should not be that difficult. Because the rule is part of subsidiary legislation, a mere notice in the official gazette by Information minister Mutahi Kagwe will do.
THE INFORMATION AND communications sector in Kenya is on a roller coaster, growing very rapidly. Total subscriber numbers for mobile phones hit a new peak of 7.1 million in October last year. Today, we are talking about a penetration rate of around 20 per cent.
Even the sick state-owned Telkom Kenya has been very active lately, cleaning its balance sheet, retrenching staff, while aggressively rolling out a CDMA fixed-wireless network in several towns.
Should we slow down the momentum merely to protect the interests of well-connected locals who won’t allow projects to roll out unless they are allowed to own shares in up-coming firms?
The Daily Nation Story by JAINDI KISERO
Friday, February 23, 2007
Regulator at Protecting Consumers
[The Daily Nation]
CCK acts to lower cost of mobile phone calls
Story by KABURU MUGAMBI
Publication Date: 2/23/2007
Mobile phone users may soon find it cheaper to call across networks after a ruling by the market regulator yesterday.
The commission directed that mobile telephone calls across networks should not exceed Sh30 a minute with effect from July 1, 2007.
Yesterday’s ruling appeared to back Celtel in its dispute with Safaricom over pricing of calls.
Safaricom charges its subscribers up to Sh50 a minute for calling the Celtel network, and Sh45 a minute for calls to Telkom, while calls within its network are as low as Sh8 a minute.
Last month, Celtel wrote a letter to the Commission accusing Safaricom of using price strategy to lock in its subscribers.
The letter from CCK said: “This is an unfair trade practice, because by penalising subscribers who chose to make calls across networks, Safaricom has made it economically disadvantageous to be a customer on other networks and in this way has restricted and distorted competition.” Celtel said that because it has not adopted a pricing strategy that locks in its subscribers, from time to time, its customers move to Safaricom.
“This is meant to ensure that subscribers are able to communicate across networks without being hindered,” CCK (Communications Commission of Kenya) director-general John Waweru told reporters at his Nairobi office. Currently, Celtel charges its subscribers a flat calling rate for calls within its network, as well as to Safaricom and Telkom Kenya.
Celtel’s corporate and regulatory affairs director Clare Ruto, who was present during the announcement, said she was delighted by outcome. “I am very happy because the ruling came out as we expected and it is in line with what is done worldwide,” Ms Ruto said.
Safaricom chief corporate affairs officer Joseph Ogutu, who also attended the Press briefing, said Safaricom was studying the ruling, and he had no immediate response.
Further, CCK has reduced to Sh6.28 a minute from Sh8.12 a minute the fee Safaricom and Celtel charge each other for calls across their networks, commonly known as interconnection rate. As a result of the new interconnection rates, the operators are required to enter into new interconnection agreements, and submit them to the commission by March 15.
“However, all operators are at liberty to negotiate lower interconnection rates subject to the capped in the determination by CCK,” Mr Waweru said.
Although she could not be drawn into whether the new pricing guidelines would mean immediate reduction in tariffs, Ms Ruto said Celtel has been lowering its prices, but was unable to push for interconnection rates reduction. Mr Waweru asked telecommunications operators to ensure that their tariffs are published and communicated on regular basis “in a concise, simple and easily understood manner by consumers.”
CCK also modified Telkom’s licence for basic retail narrow band services and its services will have a new price cap beginning July 2007. Mr Waweru said CCK would monitor the evolution of all telecommunications service prices through competition to guard the interest of consumers.
Competition between Safaricom and Celtel has intensified of late.
Recently, Celtel launched its One Network that gives subscribers one tariff for East Africa. Safaricom responded swiftly, signing a partnership with MTN in Uganda and Vodacom in Tanzania that would allow its subscribers to enjoy a similar advantage.
CCK acts to lower cost of mobile phone calls
[The Standard]
Communication regulator caps mobile tariffs at Sh30
By Tom Mogusu
Friday February 23, 2007
Mobile phone users will now pay a maximum of Sh30 on calls regardless of the tariff they are in.
Industry regulator, Communications Commission of Kenya (CCK), on Thursday ordered Safaricom and Celtel to adjust their call charges to a maximum of Sh30 from next month.
The regulator also slashed the cost of connecting calls between mobile and fixed line operators by 57 per cent to Sh1.74 from Sh4.
The CCK orders were contained in new guidelines, released on Thursday, that should open the way for a decline in the costs of telecommunication.
CCK also announced that by next month, interconnection rates between mobile networks would drop by 23 per cent to Sh6.28 from the current Sh8.12.
Guidelines expected to end a price war
CCK Director-General Mr John Waweru said the new rates are aimed at slashing the huge costs incurred when making calls across the networks.
The cost of making calls between mobile phone networks will also drop to less than Sh30 by July 1, the regulator said.
"Coupled with the lower termination rates being unveiled today, it is the Commission’s conviction that this will cultivate traffic growth, long-term revenue flows for operators and delivery of the benefits of competition to consumers and the economy at large," said Waweru.
"We believe that this new pricing system will stimulate competition and facilitate the delivery of quality and affordable services. We do not expect this to have any negative financial effect on the companies because the market’s potential is yet to be fully exploited. You just have to wait and see what I am saying ," he said.
The guidelines are expected to end a price war between Celtel and Safaricom.
Thorough analysis of the market
Mr Waweru said the new guidelines were effected after a thorough analysis of the market, which took 12 months to conclude.
The study was undertaken by Analysis Consulting Limited of the UK. It was aimed at establishing acceptable wholesale and retail costs and prices of telecommunication services to help CCK determine the best way the industry could grow.
Safaricom’s Chief Corporate Affairs Officer, Mr Joseph Ogutu, told The Standard that the firm was satisfied with CCK’s decision.
"We are satisfied so far but it takes time before we can come up with acceptable rates across the board," Ogutu said.
He said the company was aware that there would be pressure to lower the costs of telecommunications among mobile firms and defended his company against allegations that Safaricom had abused its position as the market leader.
"Our tariffs have always been at the same level even though the cost of doing business has been rising each year."
Communication regulator caps mobile tariffs at Sh30
CCK acts to lower cost of mobile phone calls
Story by KABURU MUGAMBI
Publication Date: 2/23/2007
Mobile phone users may soon find it cheaper to call across networks after a ruling by the market regulator yesterday.
The commission directed that mobile telephone calls across networks should not exceed Sh30 a minute with effect from July 1, 2007.
Yesterday’s ruling appeared to back Celtel in its dispute with Safaricom over pricing of calls.
Safaricom charges its subscribers up to Sh50 a minute for calling the Celtel network, and Sh45 a minute for calls to Telkom, while calls within its network are as low as Sh8 a minute.
Last month, Celtel wrote a letter to the Commission accusing Safaricom of using price strategy to lock in its subscribers.
The letter from CCK said: “This is an unfair trade practice, because by penalising subscribers who chose to make calls across networks, Safaricom has made it economically disadvantageous to be a customer on other networks and in this way has restricted and distorted competition.” Celtel said that because it has not adopted a pricing strategy that locks in its subscribers, from time to time, its customers move to Safaricom.
“This is meant to ensure that subscribers are able to communicate across networks without being hindered,” CCK (Communications Commission of Kenya) director-general John Waweru told reporters at his Nairobi office. Currently, Celtel charges its subscribers a flat calling rate for calls within its network, as well as to Safaricom and Telkom Kenya.
Celtel’s corporate and regulatory affairs director Clare Ruto, who was present during the announcement, said she was delighted by outcome. “I am very happy because the ruling came out as we expected and it is in line with what is done worldwide,” Ms Ruto said.
Safaricom chief corporate affairs officer Joseph Ogutu, who also attended the Press briefing, said Safaricom was studying the ruling, and he had no immediate response.
Further, CCK has reduced to Sh6.28 a minute from Sh8.12 a minute the fee Safaricom and Celtel charge each other for calls across their networks, commonly known as interconnection rate. As a result of the new interconnection rates, the operators are required to enter into new interconnection agreements, and submit them to the commission by March 15.
“However, all operators are at liberty to negotiate lower interconnection rates subject to the capped in the determination by CCK,” Mr Waweru said.
Although she could not be drawn into whether the new pricing guidelines would mean immediate reduction in tariffs, Ms Ruto said Celtel has been lowering its prices, but was unable to push for interconnection rates reduction. Mr Waweru asked telecommunications operators to ensure that their tariffs are published and communicated on regular basis “in a concise, simple and easily understood manner by consumers.”
CCK also modified Telkom’s licence for basic retail narrow band services and its services will have a new price cap beginning July 2007. Mr Waweru said CCK would monitor the evolution of all telecommunications service prices through competition to guard the interest of consumers.
Competition between Safaricom and Celtel has intensified of late.
Recently, Celtel launched its One Network that gives subscribers one tariff for East Africa. Safaricom responded swiftly, signing a partnership with MTN in Uganda and Vodacom in Tanzania that would allow its subscribers to enjoy a similar advantage.
CCK acts to lower cost of mobile phone calls
[The Standard]
Communication regulator caps mobile tariffs at Sh30
By Tom Mogusu
Friday February 23, 2007
Mobile phone users will now pay a maximum of Sh30 on calls regardless of the tariff they are in.
Industry regulator, Communications Commission of Kenya (CCK), on Thursday ordered Safaricom and Celtel to adjust their call charges to a maximum of Sh30 from next month.
The regulator also slashed the cost of connecting calls between mobile and fixed line operators by 57 per cent to Sh1.74 from Sh4.
The CCK orders were contained in new guidelines, released on Thursday, that should open the way for a decline in the costs of telecommunication.
CCK also announced that by next month, interconnection rates between mobile networks would drop by 23 per cent to Sh6.28 from the current Sh8.12.
Guidelines expected to end a price war
CCK Director-General Mr John Waweru said the new rates are aimed at slashing the huge costs incurred when making calls across the networks.
The cost of making calls between mobile phone networks will also drop to less than Sh30 by July 1, the regulator said.
"Coupled with the lower termination rates being unveiled today, it is the Commission’s conviction that this will cultivate traffic growth, long-term revenue flows for operators and delivery of the benefits of competition to consumers and the economy at large," said Waweru.
"We believe that this new pricing system will stimulate competition and facilitate the delivery of quality and affordable services. We do not expect this to have any negative financial effect on the companies because the market’s potential is yet to be fully exploited. You just have to wait and see what I am saying ," he said.
The guidelines are expected to end a price war between Celtel and Safaricom.
Thorough analysis of the market
Mr Waweru said the new guidelines were effected after a thorough analysis of the market, which took 12 months to conclude.
The study was undertaken by Analysis Consulting Limited of the UK. It was aimed at establishing acceptable wholesale and retail costs and prices of telecommunication services to help CCK determine the best way the industry could grow.
Safaricom’s Chief Corporate Affairs Officer, Mr Joseph Ogutu, told The Standard that the firm was satisfied with CCK’s decision.
"We are satisfied so far but it takes time before we can come up with acceptable rates across the board," Ogutu said.
He said the company was aware that there would be pressure to lower the costs of telecommunications among mobile firms and defended his company against allegations that Safaricom had abused its position as the market leader.
"Our tariffs have always been at the same level even though the cost of doing business has been rising each year."
Communication regulator caps mobile tariffs at Sh30
Saturday, February 17, 2007
Thorny Consumer Protection
Challenging networks control of users
Kenya telecommunications private sector has failed to effectively compete to realise envisaged benefits to consumers, but we are not alone.
Basic telephony cost has risen over five-fold from the 1999 pre-liberalization tariffs and besides mobility, other offing remain unaffordable. Mobile internet surfing, multimedia messaging, SMS-based computer program, chat, and other wonderful mobile services have failed to take off due to impossible tariffs.
In 1999, a 1-minute call cost 1 shilling but today the same call costs 5 shillings and 40 cents via Telkom network – indisputably still the cheapest. At 5 shillings per SMS, one could have talked for 5 minutes back then had liberalisation never taken place. In today’s context, a 1-minute call via Telkom mobile CDMA costs the same amount as an SMS in the Safaricom and Celtel networks.
The irony presented in cheaper mobile CDMA phone calls to other networks compared to calls within the same GSM networks only proves highly inflated tariffs and there can be no excuse for the sustained high prices.
“Flashing” and “flashback” continue to be popular ways of communicating; flashers hoping they would be called back (celcos are yet to introduce a free “I am also unable to call you” re-flash back service). Well, there may be seven million mobile subscribers in Kenya, but it would be quite interesting to find out how many of these phones ever ring, how long the conversations last, and the last top-up amount.
Subjected to a thorough cost-benefit analysis, local Information and Communication Technologies (or ICTs) have turned out to be impecunious instruments rather than prosperity enablers elsewhere in the world.
Although Telkom’s CDMA sms cost only 2 shillings and 50 cents per message, this rate could drop further and be more affordable considering West African mobile operators, for example in Senegal, offer free sms as part of their Universal Access Service contribution and they still record good profits. Consumers should urge operators to also start offering free sms in Kenya.
Scratch cards outlets at bus stop, for example, have got shoeshine and roast maize jua kali businesses crying foul and driven to near extinction and GSM companies continue to eat into other small industries earnings and trades as substitute consumption reality hit hard.
Bar owners report reduced sales with widespread mobile phones in their pubs. South Africans brewers accuse mobile phones for 20 per cent sales reduction.
Despite international satellite bandwidth prices dropping, more ISP and Internet gateways licenses, Internet end-user prices remain high, while quality deteriorates and Internet users increase. In the UK, BT Online, VirginNet, and others charge 2,400/= shillings (US$ 30) per month for a 512Kb ADSL connection while Telkom Kenya charges shillings 10,000/= for a 128 Kb ADSL. GSM companies’ charges are volume-based and vary depending on the amount of data passing through their networks.
Whether internationally recommended internet sharing ratio (or contention ratio) of 1:100 is followed is a question for another day. This ratio assures Internet “congestion” is minimised for the end users.
The essence of liberalizing the telecommunication sector was to foster competition of services, narrow development gaps and work towards universal telecommunications service, and to contain then perceived market abuses by the former state monopoly, Kenya Posts and Telecommunications Corporation (KP&TC).
Commenced through the Kenya Communication Act, 1998 the law that hurriedly split KP&TC and created the Communication Commission of Kenya. The law was very closely followed by the operational commencement of seemingly waiting mobile companies and little attention was paid to consumer protection.
In the only reference to consumers in sections 23 and 47 the Act states; “the Commission is required to ensure that communications services are provided throughout Kenya and that the interests of all users of these services are protected with respect to prices charged for and the quality and variety of those services among other responsibilities”
But overall, the interests of the consumer (which includes businesses, civil society, NGOs as well as private citizens) are paramount in market liberalization. Should worse quality and higher tariffs result, then such liberalization only succeeds in establishing market price failures and consumers ought to “enforce” self-regulation.
Effective market competition should translate to a variety of consumer options; better products, and improved customer care services, and most of all, lower prices all of which were repeatedly promised to convinced on the need to liberalize.
In normal market situations, when suppliers increase prices go down as a result of competition for customers among suppliers. Also, when demand increases prices go down because suppliers enjoy better economies of scale, or reduced bulk purchase price per unit which translates to cost savings then passed on to consumers.
Markets defying "demand and supply" principle among whose characteristics include few suppliers, sustained higher prices, poor quality of service and after-sales services, and bloated profits. Usually, overblown Corporate Social Responsibility public relations "mosquito nets", "traditional dances" and "national pride" funfair to cover up their continued consumers rip-offs.
Unofficial but structural barriers to new entrants include very high “all-inclusive” license auction fees, territorial protectionisms, dominant players disputes (“dominant player” shyly describing a private monopoly) while others include protracted legal battles, misleading advertising, or sheer terminological and intrigue games.
Collateral liberalization casualties this far includes small Internet Service Providers who now find they are competing on internet services provisioning with the Safaricom and Celtel – the GSM duo and Telkom – their former supplier. Both GSM telcos have licenses permitting them to own national infrastructure, run voice and data services, as well as Internet gateways. ISPs, on the other hand are not permitted to construct their infrastructure.
These unpleasant revelations emphasise the importance of consumer protection and the need to take on all telecomm providers to task over their activities not just on the quality of services and tariffs, but among others, on radiation, environment (such the disposal of batteries and old handsets), worth, value, and impact of their CSR programmes.
It would be quite strange if embraced consumer protection now considering their concerted past opposition to consumer protection and the lacklustre official support to this subject, up till Tuesday last week.
The Communications Commission of Kenya announced in January (Smart Company Magazine, The Daily Nation ) they would henceforth fully support organised consumer protection–the first official victory for consumer advocates. But the onslaught on these private monopolistic telcos should not stop there. Consumers should explore every policy and legal avenue to achieve lowering of tariffs and the best quality services possible.
Rather than succumb to widespread tariffs apathy consumers abyss, or continue hoping for future lowered tariffs if and when Econet, vTel, wTel, xTel, yTel or zTel ever become operational, the ICT Consumers Association of Kenya has been developing comprehensive strategies that utilise opportunities presented by the ICT policy the intention of translating aspirations into reality to benefit telecommunication users immediately.
The National ICT Policy recognizes inadequate infrastructure hinders widespread, quality, and affordable ICT uptake and the government states its commitment to facilitate infrastructure development. The policy states, "that government will encourage the sharing of the capacity of public and private utility providers (e.g. power, water, railway, etc) that have rights of way to develop the national information infrastructure"
License-free ISM frequency bands, i.e. 2.4 GHz and 5.7 GHz, are now open for public wireless data communication and the provision of broadband Internet. The use of these bands is based on the criteria of least congestion, non-protection and non-exclusiveness. Migration/allocation process is being coordinated to avoid conflict with the existing users. It would be interesting to find out if this band is not already encroached upon by private telcos.
Considering above policy declarations and that fibre optic cables cost about 75 shillings per metre and is locally available then consumers are free to construct their own networks, operate or lease them to ISPs or their choice, and at their own terms and reclaim, if at least not to reinforce, "the customer is always right" principle.
Tired of waiting for big businesses to find "business cases" in taking affordable broadband to remote areas, Canadians and Americans started campaigns dubbed "fibre to the people" in 2000, and today, Canadians are delivering Gigabytes to the home.
When government water programs failed many years ago, rural communities in Kenya started self-help water projects build dams, laid their pipes, and today they run successful irrigation and domestic water schemes. Digging trenches for much lighter fibre optic cables that could also be passed on overhead electric poles should be a lot easier that it was for water pipes.
Equipped with the enabling policy framework and the proposed Information and Communications legislation innovative consumers are strategizing construction of own wireless "mesh" networks to link to the upcoming national internet fibre backbone for quality, true broadband internet and WiMAX VOIP voice calls at most affordable prices.
In their city glasshouses, providers may continue assessing viability of taking services to rural and residential areas and if or when they finally do, it may be too late because customer-owned networks returning profits will have undivided customer loyalty from their community services providers.
Rendering credence to the saying "the world is a global village", it has just been revealed that US mobile phone users need as much, if not more, help in fighting off networks owners control.
Calling for "Network Neutrality" in the mobile phone communication networks, Professor Tim Wu of Columbia University School of Law this month published a detailed paper outlining the dirty tricks GSM companies use to kill innovation as they ensure they retain profits by controlling the services mobile users can access.
He examines the practices of the wireless industry with an eye toward understanding their influence on innovation and consumer welfare. The US wireless industry, over the last decade, has succeeded in bringing wireless telephony at competitive prices to the American public. Yet at the same time, we also find the wireless carriers aggressively controlling product design and innovation in the equipment and application markets, to the detriment of consumers.
Titled "Wireless Net Neutrality:CELLULAR CARTERFONE AND CONSUMER CHOICE IN MOBILE BROADBAND" the publication is available at http://www.newamerica.net/publications/policy/wireless_net_neutrality
ICT Consumers Association of Kenya – ICAK towards "enlightened consumer enjoying high quality and best priced ICT Services".
Kenya telecommunications private sector has failed to effectively compete to realise envisaged benefits to consumers, but we are not alone.
Basic telephony cost has risen over five-fold from the 1999 pre-liberalization tariffs and besides mobility, other offing remain unaffordable. Mobile internet surfing, multimedia messaging, SMS-based computer program, chat, and other wonderful mobile services have failed to take off due to impossible tariffs.
In 1999, a 1-minute call cost 1 shilling but today the same call costs 5 shillings and 40 cents via Telkom network – indisputably still the cheapest. At 5 shillings per SMS, one could have talked for 5 minutes back then had liberalisation never taken place. In today’s context, a 1-minute call via Telkom mobile CDMA costs the same amount as an SMS in the Safaricom and Celtel networks.
The irony presented in cheaper mobile CDMA phone calls to other networks compared to calls within the same GSM networks only proves highly inflated tariffs and there can be no excuse for the sustained high prices.
“Flashing” and “flashback” continue to be popular ways of communicating; flashers hoping they would be called back (celcos are yet to introduce a free “I am also unable to call you” re-flash back service). Well, there may be seven million mobile subscribers in Kenya, but it would be quite interesting to find out how many of these phones ever ring, how long the conversations last, and the last top-up amount.
Subjected to a thorough cost-benefit analysis, local Information and Communication Technologies (or ICTs) have turned out to be impecunious instruments rather than prosperity enablers elsewhere in the world.
Although Telkom’s CDMA sms cost only 2 shillings and 50 cents per message, this rate could drop further and be more affordable considering West African mobile operators, for example in Senegal, offer free sms as part of their Universal Access Service contribution and they still record good profits. Consumers should urge operators to also start offering free sms in Kenya.
Scratch cards outlets at bus stop, for example, have got shoeshine and roast maize jua kali businesses crying foul and driven to near extinction and GSM companies continue to eat into other small industries earnings and trades as substitute consumption reality hit hard.
Bar owners report reduced sales with widespread mobile phones in their pubs. South Africans brewers accuse mobile phones for 20 per cent sales reduction.
Despite international satellite bandwidth prices dropping, more ISP and Internet gateways licenses, Internet end-user prices remain high, while quality deteriorates and Internet users increase. In the UK, BT Online, VirginNet, and others charge 2,400/= shillings (US$ 30) per month for a 512Kb ADSL connection while Telkom Kenya charges shillings 10,000/= for a 128 Kb ADSL. GSM companies’ charges are volume-based and vary depending on the amount of data passing through their networks.
Whether internationally recommended internet sharing ratio (or contention ratio) of 1:100 is followed is a question for another day. This ratio assures Internet “congestion” is minimised for the end users.
The essence of liberalizing the telecommunication sector was to foster competition of services, narrow development gaps and work towards universal telecommunications service, and to contain then perceived market abuses by the former state monopoly, Kenya Posts and Telecommunications Corporation (KP&TC).
Commenced through the Kenya Communication Act, 1998 the law that hurriedly split KP&TC and created the Communication Commission of Kenya. The law was very closely followed by the operational commencement of seemingly waiting mobile companies and little attention was paid to consumer protection.
In the only reference to consumers in sections 23 and 47 the Act states; “the Commission is required to ensure that communications services are provided throughout Kenya and that the interests of all users of these services are protected with respect to prices charged for and the quality and variety of those services among other responsibilities”
But overall, the interests of the consumer (which includes businesses, civil society, NGOs as well as private citizens) are paramount in market liberalization. Should worse quality and higher tariffs result, then such liberalization only succeeds in establishing market price failures and consumers ought to “enforce” self-regulation.
Effective market competition should translate to a variety of consumer options; better products, and improved customer care services, and most of all, lower prices all of which were repeatedly promised to convinced on the need to liberalize.
In normal market situations, when suppliers increase prices go down as a result of competition for customers among suppliers. Also, when demand increases prices go down because suppliers enjoy better economies of scale, or reduced bulk purchase price per unit which translates to cost savings then passed on to consumers.
Markets defying "demand and supply" principle among whose characteristics include few suppliers, sustained higher prices, poor quality of service and after-sales services, and bloated profits. Usually, overblown Corporate Social Responsibility public relations "mosquito nets", "traditional dances" and "national pride" funfair to cover up their continued consumers rip-offs.
Unofficial but structural barriers to new entrants include very high “all-inclusive” license auction fees, territorial protectionisms, dominant players disputes (“dominant player” shyly describing a private monopoly) while others include protracted legal battles, misleading advertising, or sheer terminological and intrigue games.
Collateral liberalization casualties this far includes small Internet Service Providers who now find they are competing on internet services provisioning with the Safaricom and Celtel – the GSM duo and Telkom – their former supplier. Both GSM telcos have licenses permitting them to own national infrastructure, run voice and data services, as well as Internet gateways. ISPs, on the other hand are not permitted to construct their infrastructure.
These unpleasant revelations emphasise the importance of consumer protection and the need to take on all telecomm providers to task over their activities not just on the quality of services and tariffs, but among others, on radiation, environment (such the disposal of batteries and old handsets), worth, value, and impact of their CSR programmes.
It would be quite strange if embraced consumer protection now considering their concerted past opposition to consumer protection and the lacklustre official support to this subject, up till Tuesday last week.
The Communications Commission of Kenya announced in January (Smart Company Magazine, The Daily Nation ) they would henceforth fully support organised consumer protection–the first official victory for consumer advocates. But the onslaught on these private monopolistic telcos should not stop there. Consumers should explore every policy and legal avenue to achieve lowering of tariffs and the best quality services possible.
Rather than succumb to widespread tariffs apathy consumers abyss, or continue hoping for future lowered tariffs if and when Econet, vTel, wTel, xTel, yTel or zTel ever become operational, the ICT Consumers Association of Kenya has been developing comprehensive strategies that utilise opportunities presented by the ICT policy the intention of translating aspirations into reality to benefit telecommunication users immediately.
The National ICT Policy recognizes inadequate infrastructure hinders widespread, quality, and affordable ICT uptake and the government states its commitment to facilitate infrastructure development. The policy states, "that government will encourage the sharing of the capacity of public and private utility providers (e.g. power, water, railway, etc) that have rights of way to develop the national information infrastructure"
License-free ISM frequency bands, i.e. 2.4 GHz and 5.7 GHz, are now open for public wireless data communication and the provision of broadband Internet. The use of these bands is based on the criteria of least congestion, non-protection and non-exclusiveness. Migration/allocation process is being coordinated to avoid conflict with the existing users. It would be interesting to find out if this band is not already encroached upon by private telcos.
Considering above policy declarations and that fibre optic cables cost about 75 shillings per metre and is locally available then consumers are free to construct their own networks, operate or lease them to ISPs or their choice, and at their own terms and reclaim, if at least not to reinforce, "the customer is always right" principle.
Tired of waiting for big businesses to find "business cases" in taking affordable broadband to remote areas, Canadians and Americans started campaigns dubbed "fibre to the people" in 2000, and today, Canadians are delivering Gigabytes to the home.
When government water programs failed many years ago, rural communities in Kenya started self-help water projects build dams, laid their pipes, and today they run successful irrigation and domestic water schemes. Digging trenches for much lighter fibre optic cables that could also be passed on overhead electric poles should be a lot easier that it was for water pipes.
Equipped with the enabling policy framework and the proposed Information and Communications legislation innovative consumers are strategizing construction of own wireless "mesh" networks to link to the upcoming national internet fibre backbone for quality, true broadband internet and WiMAX VOIP voice calls at most affordable prices.
In their city glasshouses, providers may continue assessing viability of taking services to rural and residential areas and if or when they finally do, it may be too late because customer-owned networks returning profits will have undivided customer loyalty from their community services providers.
Rendering credence to the saying "the world is a global village", it has just been revealed that US mobile phone users need as much, if not more, help in fighting off networks owners control.
Calling for "Network Neutrality" in the mobile phone communication networks, Professor Tim Wu of Columbia University School of Law this month published a detailed paper outlining the dirty tricks GSM companies use to kill innovation as they ensure they retain profits by controlling the services mobile users can access.
He examines the practices of the wireless industry with an eye toward understanding their influence on innovation and consumer welfare. The US wireless industry, over the last decade, has succeeded in bringing wireless telephony at competitive prices to the American public. Yet at the same time, we also find the wireless carriers aggressively controlling product design and innovation in the equipment and application markets, to the detriment of consumers.
Titled "Wireless Net Neutrality:CELLULAR CARTERFONE AND CONSUMER CHOICE IN MOBILE BROADBAND" the publication is available at http://www.newamerica.net/publications/policy/wireless_net_neutrality
ICT Consumers Association of Kenya – ICAK towards "enlightened consumer enjoying high quality and best priced ICT Services".
Saturday, January 13, 2007
Mobile Tariffs: What Next?
Interconnection as the name suggests, refers to the arrangements between networks providers covering reciprocal acceptance of voice and data traffic among themselves. Interconnection "costs" are passed to the consumers.
Communications has been costly to users not because the actual cost of providing the service is high but because network owners deliberately keep interconnection rates high to “encourage” their subscribers to call and remain within their network and to retain dominance.
Analysis Consulting of UK together with McCarthy Tétrault last Friday presented their draft final telecommunications (voice) “retail and interconnection study” findings and recommendations to service providers steakholders at the Kenya College of Communications Technologies last Friday.
Inviting any substantive comments by Friday 26 January 2007, the consultants explained the study Initially expected to be completed over 6 month period was delayed by the interconnect dispute between Telkom and Safaricom mid-stream.
"Googling" Analysis Consulting before going to KCCT that returned many reputable institutions, governments and agencies certainly boosted confidence in their study findings considering that many past "experts" have come up with all manner of recommendations.
Dominant telecommunication providers (“dominant” being the new phrase describing emerging private monopolies in Kenya), safely avoids highlighting some of these networks openly stated opposition to the introduction of more players. Some of these dominant networks appear to believe that they “own” consumers on their networks, and lowering tariffs is their discretionary "favour" to subscribers.
But it should no be misconstrued that it was a favour from any GSM company to invest in telcom in Kenya. It continues to make business sense therefore seeking consumers understanding of their continued super profits does not hold much water.
Official support, “they need to recoup on their investment and expand their networks” is not very helpful to consumers much either especially while on the other hand they are fighting the introduction of more player “tooth-and-nail” as it were reported in the media defeating free market demand and supply principle.
Consumers need to severally replay every official pronouncement on this subject to know who is for, and against them.
Now, realising that the era of fixing high interconnection rates has come to an end, now they are resorting to handset offers that lock consumers to their network. This strategy takes away mobile phone user option of replacing their SIM card to enjoy a better offer a competitor may offer and also aimed at giving them a free hand at perpetually charge whatever tariffs they like within their network.
Even if offered for free, consumers should test if such handsets work with alternative networks SIM cards before succumbing to the tempting offers on their face value for they may be very costly in the long run.
Interconnection cost of shillings 8.20 per minute is charged to the consumer above the normal tariffs whenever they call that other network. If it is any consolation, this rate was shillings 23 per minute in 1999.
I re-confirm that there is no love lost between ICT Consumers Association of Kenya and them.
Meanwhile the GSM duopolist’ subscriptions numbers from January to November 2006 were as follows: -
GSM Subscribers Official Data (January - November 2006)
**December subscriptions are expected to be significantly different considering media reports of millions subscriptions following specials offers from rivalling networks.
Communications has been costly to users not because the actual cost of providing the service is high but because network owners deliberately keep interconnection rates high to “encourage” their subscribers to call and remain within their network and to retain dominance.
Analysis Consulting of UK together with McCarthy Tétrault last Friday presented their draft final telecommunications (voice) “retail and interconnection study” findings and recommendations to service providers steakholders at the Kenya College of Communications Technologies last Friday.
Inviting any substantive comments by Friday 26 January 2007, the consultants explained the study Initially expected to be completed over 6 month period was delayed by the interconnect dispute between Telkom and Safaricom mid-stream.
"Googling" Analysis Consulting before going to KCCT that returned many reputable institutions, governments and agencies certainly boosted confidence in their study findings considering that many past "experts" have come up with all manner of recommendations.
Dominant telecommunication providers (“dominant” being the new phrase describing emerging private monopolies in Kenya), safely avoids highlighting some of these networks openly stated opposition to the introduction of more players. Some of these dominant networks appear to believe that they “own” consumers on their networks, and lowering tariffs is their discretionary "favour" to subscribers.
But it should no be misconstrued that it was a favour from any GSM company to invest in telcom in Kenya. It continues to make business sense therefore seeking consumers understanding of their continued super profits does not hold much water.
Official support, “they need to recoup on their investment and expand their networks” is not very helpful to consumers much either especially while on the other hand they are fighting the introduction of more player “tooth-and-nail” as it were reported in the media defeating free market demand and supply principle.
Consumers need to severally replay every official pronouncement on this subject to know who is for, and against them.
Now, realising that the era of fixing high interconnection rates has come to an end, now they are resorting to handset offers that lock consumers to their network. This strategy takes away mobile phone user option of replacing their SIM card to enjoy a better offer a competitor may offer and also aimed at giving them a free hand at perpetually charge whatever tariffs they like within their network.
Even if offered for free, consumers should test if such handsets work with alternative networks SIM cards before succumbing to the tempting offers on their face value for they may be very costly in the long run.
Interconnection cost of shillings 8.20 per minute is charged to the consumer above the normal tariffs whenever they call that other network. If it is any consolation, this rate was shillings 23 per minute in 1999.
I re-confirm that there is no love lost between ICT Consumers Association of Kenya and them.
Meanwhile the GSM duopolist’ subscriptions numbers from January to November 2006 were as follows: -
GSM Subscribers Official Data (January - November 2006)
| | Postpaid | Prepaid | ||
| | Safaricom | Celtel | Safaricom | Celtel |
| Month | | | | |
| January | 65,115 | 23,508 | 3,560,216 | 1,860,094 |
| February | 67,955 | 24,335 | 3,717,098 | 1,920,113 |
| March | 70,794 | 24,937 | 3,883,348 | 1,999,011 |
| April | 72,428 | 25,630 | 3,965,825 | 2,078,883 |
| May | 74351 | 26,586 | 4,077,992 | 2,162,076 |
| June | 76,787 | 28,377 | 4,257,230 | 2,122,397 |
| July | 78,165 | 29,572 | 4,321,410 | 2,045,216 |
| August | 81,460 | 31,271 | 4,475,087 | 1,820,886 |
| September | 83,546 | 32,548 | 4,565,447 | 1,743,333 |
| October | 86,509 | 32,962 | 4,694,169 | 1,713,401 |
| November | 88,422 | 34,860 | 5,017,890 | 1,755,222 |
| December | | | | |
**December subscriptions are expected to be significantly different considering media reports of millions subscriptions following specials offers from rivalling networks.
One of the study recommendations proposes an active subscriber be redefined as “one who has used their line in the last 90 days” perhaps to correct networks’ misrepresentations of subscriber number as a sales gimmick.
Among the unanswered questions include: -
· Where and when do seven million mobile phones ring?
· When will we have at least five operators?
· Why is Telkom slow in rolling out and aggressively marketing their CDMA?
· Is it fair for KRA to award any company for paying taxes being legal obligations?
· Could telecommunication companies’ breakdown their CSR programs and expenditures?
· Will there come a time when customer care calls will get answered?
The Minister for Information and Communications is expected to make new rules based on the recommendations. You should make your contribution to ensure the Minister does not forget consumers plight - it has happened in the past.
If there existed an "open access" national fibre backbone cable, this whole exercise would not have been necessary because all current and future providers could connect to it infrastructure at pre-determined rates.Thus, any provider opposed to this cable prefers the current status quo be maintained and they can continue pocketing "interconnection costs" profits.
Relevant documents should be available from the Commission website http://www.cck.go.ke/
Monday, January 1, 2007
Happy New Year Kenya
[DAILY NATION]
COMMENTARY
In comes 2007, with new ‘breed’ of politicians
Story by MUTUMA MATHIU
Publication Date: 12/31/2006
Good morning ladies and gentlemen, please welcome to the captive state of Kenya.
If the Islamists in Somalia were to invade the sacred soil of our homeland, or the Norwegians or Martians or Neptunians or any other group of foreigners were to invade us and impose their rule, we wouldn’t be any more of an occupied territory than we are today.
We are captive, not to a foreign power, but to our own brothers, sisters, fathers, (a few) mothers, uncles and aunties. We are the captives of a class, the political class.
In 2002, we were “liberated”, just like Iraq was, by President Mwai Kibaki and the National Rainbow Coalition from the yoke of Mr Moi, Mr Nicholas Biwott, Mr Henry Kosgey, Mr Uhuru Kenyatta, Mr William Ruto and many other gentlemen of the same water.
A few months earlier, Mr Moi was ruling with the aid of Mr Raila Odinga, Mr Kalonzo Musyoka, Prof George Saitoti and a houseful of similar gentlemen. As you well know, Mr Odinga led Prof Saitoti, Mr Musyoka and a battalion of similar gentlemen in aiding Mr Kibaki in his liberation of our good selves.
Today, Mr Odinga is leading a strong force to liberate us from Mr Kibaki. The force includes Mr Musyoka, Mr Kenyatta and Mr Ruto and has unsuccessfully tried to enlist Mr Moi’s support in the process. Mr Moi, it would appear, may have chosen to stand with President Kibaki, the man who liberated us from him.
You could do a screenplay and win an Oscar without breaking a sweat.
In a matter of hours we will be in a year that causes palpitations right from the Governor’s Mansion on the hill to the humblest council in the bush. It’s the year of the election.
The mighty and the humble will be equal, if only for a few days, as politicians who regard themselves as some of the toughest people on earth get down on their knees (as it were) in hamlets, villages and slums where people defecate in their houses, to ask for votes.
This is the year that politicians reaffirm their commitment to their tribes in night meetings and confirm their commitment to Kenya in the light of day.
Those who had changed their numbers dust up old sim cards, call up the loyal old friends they shafted in January 2003 and flatter the market women whose smell they couldn’t stand for four years.
Politicians, who by their very construction are incapable of keeping a true friend and wouldn’t recognise loyalty if you shoved it up their nose, will suddenly be surrounded by a retinue of village failures, gritting their teeth and drinking warm beer with every description of low life.
They will eat mashed rice and watery stew at church functions — and probably have their stomachs pumped later — and attend so many funerals that by the end of the year they will be smelling of formaldehyde.
Editors, whose calls ministers might not take under normal circumstances, will have their butts kissed in an effort to pass off garbage propaganda as news.
The corruptible will be offered small handouts, others will be co-opted into “think tanks” for politicians from their tribes. Of course no politician takes the advice of the so-called think tanks, they use them as a method of buying loyalty by making people feel needed, wanted, important, consulted.
Politicians will read statements at press conferences, setting out their “vision”. The statements will have been written by other people. Little or no research will have gone into these “visions” and if they were to be implemented the country would probably explode. But they are not for implementation, they are for reading at press conferences.
The Constitution will regain its importance. We will be informed that we, the Kenyan people, have demanded that the document be turned upside down in accordance with the Bomas this or that, that our salvation lies with the politicians demanding constitutional change at rallies; that the Constitution needs to be cut to whittle down the powers of the imperial presidency, create semi-autonomous enclaves, probably ruled by relatives of the victorious political grouping and out of which the Kikuyu, or some other tribe, will probably be asked to leave.
Around August, out will come the manifestos, most of them the tepid work of ageing and unenthusiastic leftists, others cut-and-pastes from the Internet. Yet others will be an attempt to re-live the Kenyatta years and Sessional Paper No 10 of 1965. You will comb the manifestos for a single, miserable new idea and you wouldn’t find it.
Come December 29, 2007, I and a couple million others will stand in line and vote for “liberation”. The subsequent Cabinet list will likely read like the one read by Mr Moi soon after he won re-election in 1992. We will dance in the streets and write eloquent editorials about “a new beginning”; a captive nation will rise and roar approval to its captor.
Happy New Year. Drive carefully — and slowly if you can — and if you drink, hitch a ride, if your driver is behaving like a fool, please tell him so.
Don’t pay a bribe, don’t take one and if you have ever bribed me, please let me know. I will put your cheque in the mail, with specific instructions where to put your money in future.
COMMENTARY
In comes 2007, with new ‘breed’ of politicians
Story by MUTUMA MATHIU
Publication Date: 12/31/2006
Good morning ladies and gentlemen, please welcome to the captive state of Kenya.
If the Islamists in Somalia were to invade the sacred soil of our homeland, or the Norwegians or Martians or Neptunians or any other group of foreigners were to invade us and impose their rule, we wouldn’t be any more of an occupied territory than we are today.
We are captive, not to a foreign power, but to our own brothers, sisters, fathers, (a few) mothers, uncles and aunties. We are the captives of a class, the political class.
In 2002, we were “liberated”, just like Iraq was, by President Mwai Kibaki and the National Rainbow Coalition from the yoke of Mr Moi, Mr Nicholas Biwott, Mr Henry Kosgey, Mr Uhuru Kenyatta, Mr William Ruto and many other gentlemen of the same water.
A few months earlier, Mr Moi was ruling with the aid of Mr Raila Odinga, Mr Kalonzo Musyoka, Prof George Saitoti and a houseful of similar gentlemen. As you well know, Mr Odinga led Prof Saitoti, Mr Musyoka and a battalion of similar gentlemen in aiding Mr Kibaki in his liberation of our good selves.
Today, Mr Odinga is leading a strong force to liberate us from Mr Kibaki. The force includes Mr Musyoka, Mr Kenyatta and Mr Ruto and has unsuccessfully tried to enlist Mr Moi’s support in the process. Mr Moi, it would appear, may have chosen to stand with President Kibaki, the man who liberated us from him.
You could do a screenplay and win an Oscar without breaking a sweat.
In a matter of hours we will be in a year that causes palpitations right from the Governor’s Mansion on the hill to the humblest council in the bush. It’s the year of the election.
The mighty and the humble will be equal, if only for a few days, as politicians who regard themselves as some of the toughest people on earth get down on their knees (as it were) in hamlets, villages and slums where people defecate in their houses, to ask for votes.
This is the year that politicians reaffirm their commitment to their tribes in night meetings and confirm their commitment to Kenya in the light of day.
Those who had changed their numbers dust up old sim cards, call up the loyal old friends they shafted in January 2003 and flatter the market women whose smell they couldn’t stand for four years.
Politicians, who by their very construction are incapable of keeping a true friend and wouldn’t recognise loyalty if you shoved it up their nose, will suddenly be surrounded by a retinue of village failures, gritting their teeth and drinking warm beer with every description of low life.
They will eat mashed rice and watery stew at church functions — and probably have their stomachs pumped later — and attend so many funerals that by the end of the year they will be smelling of formaldehyde.
Editors, whose calls ministers might not take under normal circumstances, will have their butts kissed in an effort to pass off garbage propaganda as news.
The corruptible will be offered small handouts, others will be co-opted into “think tanks” for politicians from their tribes. Of course no politician takes the advice of the so-called think tanks, they use them as a method of buying loyalty by making people feel needed, wanted, important, consulted.
Politicians will read statements at press conferences, setting out their “vision”. The statements will have been written by other people. Little or no research will have gone into these “visions” and if they were to be implemented the country would probably explode. But they are not for implementation, they are for reading at press conferences.
The Constitution will regain its importance. We will be informed that we, the Kenyan people, have demanded that the document be turned upside down in accordance with the Bomas this or that, that our salvation lies with the politicians demanding constitutional change at rallies; that the Constitution needs to be cut to whittle down the powers of the imperial presidency, create semi-autonomous enclaves, probably ruled by relatives of the victorious political grouping and out of which the Kikuyu, or some other tribe, will probably be asked to leave.
Around August, out will come the manifestos, most of them the tepid work of ageing and unenthusiastic leftists, others cut-and-pastes from the Internet. Yet others will be an attempt to re-live the Kenyatta years and Sessional Paper No 10 of 1965. You will comb the manifestos for a single, miserable new idea and you wouldn’t find it.
Come December 29, 2007, I and a couple million others will stand in line and vote for “liberation”. The subsequent Cabinet list will likely read like the one read by Mr Moi soon after he won re-election in 1992. We will dance in the streets and write eloquent editorials about “a new beginning”; a captive nation will rise and roar approval to its captor.
Happy New Year. Drive carefully — and slowly if you can — and if you drink, hitch a ride, if your driver is behaving like a fool, please tell him so.
Don’t pay a bribe, don’t take one and if you have ever bribed me, please let me know. I will put your cheque in the mail, with specific instructions where to put your money in future.
Sunday, December 31, 2006
I shall blogg in 2007!
Date: 31/12/2006 Time 12:48 PM Nairobi, Kenya.
Be very afraid of the emergent local telecommunication–government Public Private Partnerships-‘PPP’ model if “virtual business lobby” groups are pursuing it. Governments around the world ascend to power essentially on political promises that they have to fulfil. Taxes enable them to achieve those promises. Companies, on the other hand are driven solely by the profit motive; “if there is not business case it is not worth investing in.”
Both of these eye consumers and "profitable market" and "tax base" and in many countries they jointly perceive consumer protection as a threat to the status-quo and thus impoverished consumer protection environments are very good for them.
What happens when government and business collude to achieve their respective expectations? Perhaps local Enrons
Happy mobile companies reduced their tariffs for Christmas and New Year?
Cutting through the celcos advertising hype gets to the real telecommunication prices the consumer may find enlightening.
Take Safaricom advertisement, for example, “From midnight 21 December 2006 up to midnight 1 st January 2007 call at only 10/= per minute”
Truth be told: Because 23, 24, 25, 26, 30, 31, and 1 January are either holidays or Week-ends where off-peak tariffs apply when and that most of their subscribers are on the *default* pre-paid tariff of 32.50 (peak), 11/= (off-peak), essentially their “Merry Christmas” was largely for four days 22, 27, 28, and 29 December.
It is incomprehensible why it costs the consumer shilling 10/= to find out their phone airtime balance via IVR(Interactive Voive Response) but cost nothing when they send an sms to find out the balance.
Turning to Celtel advertised “Uhuru kwa Jamii” 12/= per minute tariff, they never bother to explain in the advertisements what call set-up fee of 2.5Ksh per answered call is, thus the least call cost is shillings 14.50, truth be told. The same for “Uhuru kwa Umoja” tariff of shilling 16/= per minute (+add 2.5Ksh per answered call).
Under the current laws mobile companies can change their tariffs any way they like and they “only need inform” CCK of their new tariffs. Today, CCK has old rates and this could mean either they have not informed CCK or the regulator has not bothered to update their site. On their website, the CCK advices visitors to go to respective companies for the most current tariffs.
This means that the companies can charge *whatever they like* and the consumer has no recourse. I wonder how many have ever tried to lodge a complaint with the CCK as prescribed by the law and saw any action taken?
Is the CCK still in control or are they all too eager to look the other way while consumers lounge in disenfranchisement? Welcome to Kenya, long policy processes, wonderful policies, beautiful laws – but terrible implementation.
Consider http://www.cck.go.ke/tariff_regulation/, which says: -
“Tariff Regulation forms part of the core mandate of the Commission. Tariff [price] regulation entails the prescription of guidelines on how to determine fees to ensure competitive and affordable pricing structures for postal and telecommunications operations…. The element of prices has significant bearing on the development of Universal Services and general economic development hence CCK's regulatory intervention is critical.”
I wonder if some of these constitute “misleading advertising” criminal under provisions contained in the Kenya Information and Communications Bill-2006?
Information and communication consumer protection in Kenya suffers several from lacklustre official support and no official funding. As a result, come 2007 I have decided to blogg these consumer issues and I shall take each one of them in turns Telkom being next. CCK is likely to receive the worst thrashing because it is the Regulator’s failure to protect any nor fund consumer protection initiatives that perpetuates the apathetic state.
The Ministry of Information and Communications should explain where they have taken vital documents (National ICT Policy, Information and Communications Bill, Media Bill, Freedom of Information Bill, etc) from the ministry website now replaced by a colourful website full broken links some replaced by several dot com websites diversions. Or could these dot coms be new *government* departments? I have no idea.
This is especially important when the information bill is at an advanced stage and we would no want some changes favouring telecommunication companies - their newfound partners sneaked through the back door to further detriment of ICT consumers.
If only the documents were available online, I would have refered to the specific ICT policy clause urging consumers to take responsibility and highlight issues affecting them. But now I cannot because an otherwise fully functional ministry website with all the documents has been put down - and replaced with a colourful but nearly empty template.
Strangely, lately it has become impossible to get any responses from the Ministry as the Accounting Officer is said to be in meetings and calls and emails are not returned.
The joy about blogging is that CCK is legally denied the power to control content over the Internet so they cannot legally shut down any blog.
I shall blogg in 2007 that is my New Year resolution full stop.
Be very afraid of the emergent local telecommunication–government Public Private Partnerships-‘PPP’ model if “virtual business lobby” groups are pursuing it. Governments around the world ascend to power essentially on political promises that they have to fulfil. Taxes enable them to achieve those promises. Companies, on the other hand are driven solely by the profit motive; “if there is not business case it is not worth investing in.”
Both of these eye consumers and "profitable market" and "tax base" and in many countries they jointly perceive consumer protection as a threat to the status-quo and thus impoverished consumer protection environments are very good for them.
What happens when government and business collude to achieve their respective expectations? Perhaps local Enrons
Happy mobile companies reduced their tariffs for Christmas and New Year?
Cutting through the celcos advertising hype gets to the real telecommunication prices the consumer may find enlightening.
Take Safaricom advertisement, for example, “From midnight 21 December 2006 up to midnight 1 st January 2007 call at only 10/= per minute”
Truth be told: Because 23, 24, 25, 26, 30, 31, and 1 January are either holidays or Week-ends where off-peak tariffs apply when and that most of their subscribers are on the *default* pre-paid tariff of 32.50 (peak), 11/= (off-peak), essentially their “Merry Christmas” was largely for four days 22, 27, 28, and 29 December.
It is incomprehensible why it costs the consumer shilling 10/= to find out their phone airtime balance via IVR(Interactive Voive Response) but cost nothing when they send an sms to find out the balance.
Turning to Celtel advertised “Uhuru kwa Jamii” 12/= per minute tariff, they never bother to explain in the advertisements what call set-up fee of 2.5Ksh per answered call is, thus the least call cost is shillings 14.50, truth be told. The same for “Uhuru kwa Umoja” tariff of shilling 16/= per minute (+add 2.5Ksh per answered call).
Under the current laws mobile companies can change their tariffs any way they like and they “only need inform” CCK of their new tariffs. Today, CCK has old rates and this could mean either they have not informed CCK or the regulator has not bothered to update their site. On their website, the CCK advices visitors to go to respective companies for the most current tariffs.
This means that the companies can charge *whatever they like* and the consumer has no recourse. I wonder how many have ever tried to lodge a complaint with the CCK as prescribed by the law and saw any action taken?
Is the CCK still in control or are they all too eager to look the other way while consumers lounge in disenfranchisement? Welcome to Kenya, long policy processes, wonderful policies, beautiful laws – but terrible implementation.
Consider http://www.cck.go.ke/tariff_regulation/, which says: -
“Tariff Regulation forms part of the core mandate of the Commission. Tariff [price] regulation entails the prescription of guidelines on how to determine fees to ensure competitive and affordable pricing structures for postal and telecommunications operations…. The element of prices has significant bearing on the development of Universal Services and general economic development hence CCK's regulatory intervention is critical.”
I wonder if some of these constitute “misleading advertising” criminal under provisions contained in the Kenya Information and Communications Bill-2006?
Information and communication consumer protection in Kenya suffers several from lacklustre official support and no official funding. As a result, come 2007 I have decided to blogg these consumer issues and I shall take each one of them in turns Telkom being next. CCK is likely to receive the worst thrashing because it is the Regulator’s failure to protect any nor fund consumer protection initiatives that perpetuates the apathetic state.
The Ministry of Information and Communications should explain where they have taken vital documents (National ICT Policy, Information and Communications Bill, Media Bill, Freedom of Information Bill, etc) from the ministry website now replaced by a colourful website full broken links some replaced by several dot com websites diversions. Or could these dot coms be new *government* departments? I have no idea.
This is especially important when the information bill is at an advanced stage and we would no want some changes favouring telecommunication companies - their newfound partners sneaked through the back door to further detriment of ICT consumers.
If only the documents were available online, I would have refered to the specific ICT policy clause urging consumers to take responsibility and highlight issues affecting them. But now I cannot because an otherwise fully functional ministry website with all the documents has been put down - and replaced with a colourful but nearly empty template.
Strangely, lately it has become impossible to get any responses from the Ministry as the Accounting Officer is said to be in meetings and calls and emails are not returned.
The joy about blogging is that CCK is legally denied the power to control content over the Internet so they cannot legally shut down any blog.
I shall blogg in 2007 that is my New Year resolution full stop.
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