Regulator orders telecoms, ICT operators to pay Sh1b dues

ICT satellites.

Telecommunications service providers have been given one month to remit contributions to the Universal Service Fund (USF) or face penalties.

The Information, Communication and Technology Ministry warned that operators who will not have made their contributions to the kitty by end of August will face sanctions, including having the Communications Authority of Kenya (CA) forcefully recover the money.

The USF is a kitty set up last year and is mandated to grow access of ICTs in far flung areas that are deemed uneconomically viable by operators and hence have little or no coverage.
ICT companies including mobile network operators and internet service providers are required by law to remit 0.5 per cent of their annual turn over to the USF.

The money will then be invested by CA under the guidance of recently unveiled Universal Services Advisory Council (USAC) in extending ICTs services to remote areas.
The operators were supposed to have made their contributions for 2013/2014 financial year by end of June but only a handful out of the over 500 licensees have paid up. Among the mobile operators, only Telkom Kenya (Orange) has remitted the money, while Safaricom, Airtel and Essar Telecom Kenya (yuMobile) had not made their contributions by mid-July.

“All the operators have until end of August to make their contributions to the USF after which we will start to impose penalties,” said Fred Matiang’i, Cabinet Secretary ICT.

He spoke yesterday when he inaugurated the Authority’s new board of directors and members of USAC.
The authority expects to raise Sh1 billion from the operators for the Fund.

This will be in addition to Sh1 billion seed money made by the authority at the beginning of the last financial year.

Francis Wangusi, Director General CA said the regulator had as at July 15, received Sh45 million.
A bulk of the Sh1 billion that will be paid by industry players is expected to come from Safaricom.

The company, which had a total revenue of Sh144.7 billion in its full year ended March 2014, will pay a substantial Sh723 million, which translates to over 70 per cent of the entire industry contribution to the USF kitty.

“We ought to have had USAC in place by June, but took a bit of time in having the Council in place and that is why we are saying that we should give the operators more time to remit their contributions. We also expect the members of the Council to have meetings with players over the next 30 days and are expected to make their contributions,” said Matiang’i.

Business
Premium Financial hardships dampen Easter celebrations among Kenyans
Business
Premium Water PS Korir put on the spot over Sh14m dam land
Business
Premium Looming crisis as top lenders stare at Sh500b in bad loans
Business
Premium Ruto's food security hopes facing storm amid fake fertiliser scam