Kenya: Telkom and Airtel face sanctions for poor quality of service during the 2022/2023 financial year
January 21st 2024
The Communications Authority of Kenya (CA) has announced that it has imposed penalties on Telkom Kenya and Airtel Kenya for poor quality of service at the end of the 2022/2023 financial year. Both mobile operators have performance rates of 65% and 79% against a regulatory threshold of 80%. Safaricom is at 90%. The regulator is also threatening to apply a higher level of sanction if current performance is not improved in the next assessment.
“Airtel Kenya Networks and Telkom Kenya failed not only to meet their coverage targets, but also a number of key quality of service indicators, in particular the ‘Failed Call Ratio’ and the Internet Data Key Metrics, which are an indicator of Internet coverage and Internet availability/accessibility, respectively,” the report reads.
The CA acknowledges that the performance of Telkom Kenya and Airtel is influenced by market stratification and competition. The two telecom operators are struggling to carve out a place for themselves in a telecoms market dominated by Safaricom. At the end of the 2022/2023 financial year, the latter held 66.1% of the mobile telephony market share, compared with 27.2% for Airtel and 3.8% for Telkom. Safaricom also controls 62.8% of mobile broadband subscriptions and 97.1% of mobile money users.
Meanwhile, data from the Communications Watchdog shows that mobile services generated revenue of 339.4 billion Kenyan shillings (US$2.1 billion) in 2022. In the mobile segment, Airtel and Telkom hold 17.7% and 4.7% of total revenues, respectively, compared with 77.4% for Safaricom. The latter controls 76.3% of mobile data revenues, compared to 15.5% for Airtel and 5.9% for Telkom.
“Quality of service is seen as a product of market investment levels, investment levels are seen as a product of subscriber numbers and revenue generation, and market balance and consumer confidence are seen as a product of regulatory interventions,” the CA said. It therefore promises to pursue regulatory interventions that will balance the market and ensure the success of the various players.
Source: Agency EcoFin Back