So, the board of the Communications Authority of Kenya (CA) on Friday evening sent director general Francis Wangusi on compulsory leave. The explanation given by the board for the action is malpractice in staffing and promotions at the regulator. Well, straight away you can tell that is not a good enough explanation for sending a DG packing by the CA Board. When I first saw that, I asked myself whether the HR committee at the Board also went home or HR manager and at the end I realized that the explanation is basically FAKE News. So it is time to try and figure out the issues that probably landed Wangusi in trouble.
To start with, Business daily mentioned a few reasons why Wangusi was sent home though I don’t agree with some of them. For example, the issue of the then Safaricom’s dominance position. This is an issue that has been around for a while and the public is very much divided about it, but I don’t see or believe that it is the reason why the Board would act against Wangusi. I remember when the report about the dominance came, Cabinet Secretary Joe Mucheru opposed it outright. His point was that when you look at Safaricom from Africa perspective or globally, Safaricom is still a small company. Here is what he said then:
“Safaricom is not among top 10 biggest telecoms in Africa. Splitting businesses will be a problem because at the moment Kenya wants to be the best in Africa. You cannot begin to punish companies for their innovativeness. Changes provided by Safaricom are significant. Nobody can say that is not the case,”
From that, there is no way that could be the reason a board hired by the CS would fire the DG.
So if that is not the case then let’s move to the ones that I think could be in the heart of everything. The CA’s award of a 4G License to Jamii Telecommunications Limited (JTL) and the revelation in court last year that Airtel has been operating at the mercy of CA since its spectrum had expired on January 27, 2015. More on the Airtel issue later. There have been many questions on the criteria used to award 700MHz spectrum band to Jamii Telecommunications Limited by CA for alleged testing. I said alleged because JTL launched its 4G network sometime back more like they had already received a permanent license. Their words did not look like people who were piloting or testing a system. When Safaricom was awarded 800MHz to test, they did it quietly, before eventually launching the 4G in Kenya. Before the launch, CA again made a mistake by awarding Safaricom the entire 800MH but was challenged in court which later forced them to allow the band to be shared by the other telcos (Telkom and Airtel).
I know one would still be asking where is the fault of CA on this JTL issue? A twitter user by the name @Allenochi did an excellent thread on this and I would encourage you to head there and read it. But the main point is that the CA promised to do a public auction of the 700MHz spectrum but it seems now that JTL has been given the spectrum at only Ksh100,000, something that all other telcos feel is very unfair. CA maintains that JTL was given the spectrum on a trial basis but then why would CA allow JTL to launch the 4G based on it for the public consumption as if they already have the permanent license. What will happen if the auction is done, if that’s the case and JTL is not among the new winners of the bidding process…will the people who are currently subscribing to JTL 4G be told to go to hell?
It is important to point out that the other big telcos like Safaricom, Airtel and Telkom want a bit of 700MHz because technically it is much better in supporting the coverage in the remote areas. Macharia Kamau gave a better explanation here;
“The 700MHz band could easily be the best frequency range to deploy a high speed network on. Telecoms analysts have described it as the most valuable resource as far as mobile telephony services are concerned. This is due to cost effectiveness in rolling out networks, in that, an operator’s base station covers a larger area than when using other spectrums. Also, it is its ability to offer better quality services within buildings and areas with thick foliage”
Because CA is not clear on how JTL got the Spectrum and whether they will do the public auction for the spectrum is a good reason to send the Mr Wangusi home.
But there could be another reason which is more economic based. When you look at the economic environment in Kenya at the moment, it is not favourable and those who are in the know say things are bad. The country is broke in a way, we are basically in a rat hole after uncontrolled borrowing in the last few years. There were even talks of Kenya defaulting on some of those loans at the end of last year. The Government needs the money, and I guess many within the Government cycle were shocked that Airtel has been operating the 4G license for free from the beginning of 2015. The Ksh. 2 Billion that Airtel owes the Government could go a long way to plug a few financial holes here and there for the Government
How CA has handled that case of Airtel could be another reason for sending Mr Wangusi home.