CCK prods telecom players on new fund

April 1, 2009
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, NAIROBI, Kenya, Apr 1 – The Communications Commission of Kenya (CCK) has said that it will in the next few weeks seek suggestions from telecommunication sector players on how to implement the Universal Access Fund.

CCK Assistant Director for Universal Service Obligation and Funding Susan Mochache told reporters on Wednesday that the establishment of this Fund seeks to facilitate the provision of affordable ICT services countrywide is necessary if the government is to achieve its objectives of expanding telecommunication services in remote areas.

“We should be able to engage the stakeholders in the next one or two months and we will know from that point how soon we shall implement because a lot of this will be based on how much ownership we get from the operators,” she added.

Many providers have been against the setting up of this fund, which requires them to contribute a certain percentage of their gross earnings towards it, arguing that extra levies are a burden on them as they are already overtaxed.

The operators, particularly the mobile phone service providers, have complained that the 16 percent Value Added Tax and the 10 percent excise tax are already too high.

The discussions, she said, would revolve around what percent the operators would be required to pay as well as the areas to be given priority.

The development of the Universal Access programme was contained in the controversial Kenya Communications Amendment Bill 2008, which was passed into law in January.

Citing Uganda where the Fund has enabled the government to roll out services in the underserved areas of the country, Ms Mochache urged operators to look at the benefits that could accrue from such an experience.

“The same operators are the ones who are going to roll out these networks, the only element about the Fund is that it helps them to leverage their investments in those areas,” she argued.

Ms Mochache spoke during the opening of the two day GSM conference on ICT, where she also disclosed that operators in the telecommunication sector have invested Sh151 billion into the industry in the last two quarters.

She attributed the investments to the increased competition, which had also led to the introduction of innovative products and services and pledged the regulator’s support for further growth in the market.

“We are moving to a point where the operators are bundling offers that is having both voice and data (services) delivered on the same platform. These are some of the outputs that will signal to us that the Kenyan market is moving towards being very competitive,” Ms Mochache said.

She also disclosed that they are working on a draft policy that will guide infrastructure sharing in the industry.

This guideline, she said, would encourage the sharing of certain elements within networks and it would be beneficial to particularly the new entrants in the market.

According to the International Telecommunication Union, network sharing has the potential to lower the cost of deploying broadband networks, which can in turn support the widespread and affordable access to ICT.

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