Kenyan telecommunication companies; Safaricom, Orange, Telkom and YU are likely to enjoy a cut in annual frequency fees following Communication’s Commission of Kenya positive signal in a bid to save to save the industry tens of millions of shillings.
The telcos have been lobbying for CCK to reduce the charges for the longest time since they have been extremely high; Safaricom paid an estimated 1.5 billion for its frequencies license in 2012, while Telkom Kenya is now facing a sh700 million bill going by the current rates which hinders its capacity for expansion affecting network quality.
The Communication Commission charges spectrum feees based on the number of microwave links, radio transceivers and spectrum that operators have in their network meaning that operators have in their network meaning an operator with more links pay more.
“The fees were lowered two years ago but that was not enough. The cost of frequencies versus revenue still stand at 30 per cent,” said Mickael Ghossein CEO, Telkom Kenya.
The frequency fees will be reviewed after every two years to keep pace with sector charges indicating the telcos should review during the second quarter next year. The charges were last cut by 41 per cent two years ago saving the market leader nearly sh1 billion bill.