Spectrum fees have always been very high in Kenya.
The issue, however, is being revisited by operators who have since cited the high fees as being an impediment to reducing the cost of operations.
The fees are paid to ICT regulator the Communications Authority of Kenya (CA).
Letters from both Safaricom and Airtel to the CA are lobbying for a downward revision of the charges. The plea’s main point is that a review of spectrum fees will enable carriers to deploy cheaper services to customers.
According to the Nation, both Safaricom and Airtel say that CA’s current structure does not allow companies to compete fairly in the telecom space.
Leader Safaricom was the first one to launch LTE services. The development cost KES 2.5 billion in license fees.
Three years later, Telkom Kenya launched 4G services at the same price. This was a big gap from Safaricom’s that is in a financial position to pay for spectrum.
Airtel Kenya only launched 4G two years ago.
The different launch periods showcase a space where wealthy telecoms operators have an edge over rivals, which then kills or discourages fair competition.
The issue has since been raised by Airtel Kenya before. Airtel had suggested that license fees should be based on a telco’s earnings.
According to Safaricom’s letter to the CA, ‘The spectrum fees need to assist operators in striking a balance between efficient use of the resource and the cost of the service to the customers.’
Airtel Kenya adds that ‘excessive fees can impede policy goals of delivering broadband access to everyone and lead to valuable spectrum remaining unsold.’
Airtel further brings it earlier argument, that ‘there is a strong economic case to avoid the level of spectrum fees being determined on the basis of revenue-maximising objectives.’
The next phase of spectrum technology will see the launch of 5G. Of course, we expect Safaricom to be the leader in this, although a calendar has not been given.
The price for 5G spectrum has also not been revealed.
The lobbying follows Safaricom HY 2021 FY results that saw the company announce a drop in earnings after many years.
