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Managers:
- Mr. Samuel K. Chepkong'a, Managing Director
- Mr. Mutua, Public Relations Officer
Contact
Postal Address:
P.O.Box 14448, Nairobi, Kenya.
Visiting Address:
Longonot Place, 5th floor, Kijabe St. Nairobi.
Tel: +254 (2) 240165 / 240173
Direct Line MD: +254 (2) 247737
Tel: PRO: +254 (2) 240173
Fax: +254 (2) 252547 / 247734
E-mail: skchepkonga@eafix.net
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 INTERVIEW ON THE ROLE OF CCK IN DEVELOPMENT OF TELECOMMUNICATIONS |
What is CCK?
The Communications Commission of Kenya (CCK) is a regulatory body for the Communications sector in Kenya. It was established by the Kenya Communications Act 1998 following the issuance of the Policy Framework Paper, the Postal and Telecommunications Sector Policy Statement of January 1997. The mandate of CCK is to provide and enabling environment for the service providers and for the right and obligations in respect of licensing interconnection, management of radio frequency spectrum, public service obligation and fair competition which will ensure the protection of subscribers and investors interests. The Act also provides for competition in the postal sub-sector but all players will have to be licensed by the Commission.
What is your immediate assignment as CCK manager?
I see as my immediate assignment the granting of licenses (upon application) to the three successors of KPTC i.e. Telkom (K) Ltd., Postal Corporation of Kenya (PCK) and Safaricom, a Telkom Kenya subsidiary in charge of mobile telephone services. In fact, I have already give a 60 (sixty) day notice to any person or parties with any issues to raise pertaining to the forthcoming granting of licenses to the three entities. Upon expiry of the 60 (sixty)-day notice, the proposed licenses will be duly issued to the said organizations, a feat which will also result in the final separation of KPTC into the various proposed entities. On the same token, it is also our intention to license a second cellular operator before mid 2000. To start off the process, we have already finalized the license to be issued to the second cellular operator and we expect to issue a pre-qualification tender for the operation of the same within the month. It is our intention to invite local and international operators through international competition bidding to ensure transparency and accountability in this process.
How does CCK intend to assist in the rapid development of telecommunications?
Pursuant to the guidelines spelt out in the Telecommunications and Postal Sector Statement as well as the provisions of the Act, the CCK will rekindle the development of the sector through the licensing of new players. This strategy is aimed at increasing customer choice and accelerate investment through private sector participation. Also, through the creation and enforcement of appropriate regulations and licensing procedures, CCK intends to encourage the development of universal service to all un-served and under-served areas at affordable prices. The licensing of multi-operators in Paging, Internet services, the second cellular operator, the divestiture of Telkom (K) Ltd., and the Rural Telecomm Operators in various parts of the country should also be viewed along these lines.
Kenya is economically ahead of her East African neighbors in many facets except in telecommunications. What is CCK doing to bridge this gap?
I do quite agree with your statement that Kenya is ahead. However, on the second part of your statement, I don't suppose that to be a statement one can say is entirely factual and true. Let me try to clarify the scenario here. At the beginning of 1998, Kenya's telephone network had over 270,000 exchange line connections compared to Tanzania and Uganda, which had around 94,000 lines and 52,000 lines respectively. Our telephone teledensity (number of lines per 100 population) is almost 1 per 100 compared to Tanzania and Uganda, which have penetration levels of 0.3 and 0.25 respectively. Kenya also had over 600 public pay phones and 460 Internet host computers compared to 25 and 30 for Tanzania and Uganda respectively. In terms of telecomm contribution to GDP, we had 4% revenues of over US $ 307 million compared to figures of 0.85% and US $ 39 million for Uganda and about 0.6% and US $ 72 million for Tanzania. Perhaps it may be worth mentioning that both our neighbors as well as some other Sub-Saharan Africa countries started the liberalization process a little earlier than we did, hence some of their prices for basic telephone and cellular services have been brought down more progressively than we have done. The trend is absolutely true in this industry and we in CCK do recognize and appreciate this fact. The opening up of competition in Kenya is no doubt expected to push prices down in addition to increasing network roll-out and efficiency. I can assure you, including all the stakeholders in this sector, that CCK is here to facilitate this process and ensure that this sector develops to greater height to meet the future demands of this country.
How is CCK going to balance between liberalizing the telecommunication industry and at the same time preserving aspects of national interest ?
Issues of national interest vis-a-vis telecomm liberalization are of paramount importance to the Government. Our aim is to foster and manage the development of modern, quality and affordable communications services with a strong Kenyan participation. To this end, it will, first and foremost, initially be a requirement that any firm licensed to provide services in the Kenyan market should have at least 60% of its beneficial equity owned by Kenyans. Secondly, the privatization of Telkom (K) Ltd. is structured in such a way that Kenyans also adequately participate in running it. Therefore, after the intended sale of the company's 26% equity to a strategic investor, 20% of the remaining stock will be off-loaded to employees and local and international investors through the Nairobi Stock Exchange. Similarly, and as earlier mentioned, universal service obligations will be instituted to ensure rapid roll out of the network and affordable prices to Kenyans. Towards this goal, we shall license Rural Telecomm Operators in designated areas ant the same 60:40 equity participation shall prevail. |
The story of allocation of frequencies to broadcast stations has been a thorny one in Kenya. How does CCK aim at addressing this issue to the satisfaction of all parties?
As you may be aware, the frequency spectrum is a scarce and strategic national resource that should be judiciously adMinistered according to national needs and aspirations. There are basically two categories of frequencies, one for telecommunications services such as trunk radio links for microwave communication, mobile telephone services, paging services etc., and the other for Radio and TV broadcasting. With regard to broadcasting frequencies, prospective licensees require a broadcasting permit as provided for under Cap 21 of the KBC Act. Upon presentation of the permit, availability of frequencies at CCK is determined and where feasible, allocation is done.
To ensure proper coordination and issuance of frequency licenses, we in CCK are already computerizing this area including all records to help us plan better this scarce resource for the benefit of all Kenyans.
Poor services and unaffordable pricing are some of the drawbacks that Kenyans are faced with in the telecommunications sector. Do you see CCK's role addressing these issues satisfactorily?
Absolutely, but in stages according to the law and the country's sector policy guidelines. First, through the introduction of competition in various market segments and licensing of new players to increase supply and create the impetus for provision of better services. We also wish to embark on a tariff re-balancing exercise involving service providers as a means towards fostering fair competition. Subsequently, each service provider will have to file to the CCK, cost-based prices for scrutiny and approval; there shall also be specific grades of service for service providers and operators and strict but conducive enforcement procedures. Similarly, the CCK will provide a forum for public complaints to ensure that their needs are well catered for. Through competition, we expect that operators will take advantage to introduce modern, appropriate and cheaper technologies to ensure that the sector offers better services at affordable rates.
What is your timetable in the liberalization of telecommunications in Kenya and what are your priority areas?
Our program for the liberalization of the sector is guided by and must reflect the guidelines provided for by both the Sector Policy Statement and the Communications Act. However, issues of immediate concern relate to the granting of licensed to Telkom Kenya, Postal Corporation of Kenya and the Safaricom/Vodafone joint venture by the beginning of July 1999. It is also our intention to invite bids for a second cellular operator in December 1999 and ensure operations by the successful bidder by February 2000. Regional Telecomm Operators, Internet Service Providers and drawing up of interconnection principles for Telkom Kenya and its subsequent competitor are also high on our agenda.
Doubts have been voiced as to how impartial CCK is going to be given the fact that it is an offshoot of KPTC who are also expected to compete in the liberalized market. Please comment.
I would like to emphasize that the CCK is a statutory body established under the Kenya Communications Act, which also sets out its functions. It is a corporate body with powers to sue and be sued and will operate independently and autonomously from any undue influences. CCK is also expected, under the law, to discharge its functions fairly and impartially and is also provide by the law with elaborate legal and functional safeguards appropriate for the sustainable development of a multi-operator regulatory environment. Moreover, the law provides a separate and independent forum, through the Appeals Tribunal, to which aggrieved parties may seek legal redress against unfair treatment. The impartiality and independence of the CCK is therefore, well entrenched hence those doubts should not exist at all.
Finally, what is your message to consumers and providers of telecommunications in Kenya?
I would like to inform all stakeholders that the days of monopoly are fast disappearing in the global communications environment and we, as a country, are no exception to this global wind of change. As CCK, we intend to foster and pursue those policies that will ensure greater consumer choice through progressive sectoral liberalization and through increased market opening through competition. This strategy, will in our view, facilitate an environment in which modern affordable and state-of-the art communications services are offered to Kenyans of all walks of life. Finally, I would like to add that CCK being the Gateway, the Link and the Watchdog to Kenya's communications industry into the next millenium and beyond, we are ready to work with all stakeholders for the benefit of all Kenyans. |
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© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Kenya published in Forbes Global Magazine.
November 29th 1999 Issue.
Developed by AgenciaE.Tv |
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