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TMCNet:  Mobile Service Operators Risk Penalties Over USF Delays

[August 04, 2014]

Mobile Service Operators Risk Penalties Over USF Delays

(AllAfrica Via Acquire Media NewsEdge) The deadline for telecommunications service providers to pay their contributions towards the Universal Service Fund (USF) by the end of this month is looming.

The two main mobile service providers Safaricom and Airtel have questioned the lack of representation to the Universal Service Advisory Council (USAC) and being sidelined in the formation of the governing body.

Originally, the Communications Authority of Kenya had agreed to expand the membership of the USAC from six to nine so as to accommodate representatives from the contributing bodies but failed to do so.

Airtel Kenya also questioned the administrative structure of the USAC. Adil El Youseffi, CEO Airtel Kenya had requested that guidelines be issued on the criteria used for the selection of projects that would be funded from the USF kitty so as to ensure transparency.


To top up towards the Kenya shilling 2 billion required to make the fund operational, mobile network operators and internet service providers are required by law to remit 0.5% of their annual turnover. The Communications Authority of Kenya is to contribute Kenya shillings 1 billion, which is half the total amount.

The fund was set up close to six years ago to help boost telecommunication infrastructure in the country's remote areas which are often not considered to be financially viable.

Section 843 of the Kenya Communications Amendment Act of 2009 established the Universal Service Fund which was to be administered by the Communications Commission of Kenya (CCK), now the Communications Authority (CA). The objective was to support the widespread access to, support capacity building and promote innovation in information and communication technology services.

Originally, the contributions by the communication service providers were to be 1% of their annual revenues.

"All the operators have until the end of August to make contributions to the Universal Service Fund after which we will start to impose penalties." The Cabinet Secretary for ICT, Fred Matiang'i said.

Penalties against the communication service providers that fail to contribute come the deadline will include the withdrawal of services.

Francis Wangusi, Director General of the CA pointed out that the service providers have the most to gain as the funds will, in the long run, be used to support the expansion of communication services in remote areas.

Matiang'i also added that the funds would support expansion of communication services to schools and health facilities and support capacity building in ICT and innovations that rely on technology.

The fund is also targeted at easing access to communication for persons in vulnerable groups.

Copyright CIO East Africa. Distributed by AllAfrica Global Media (allAfrica.com).

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