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Renewed operating licence for Safaricom to cost $27mn

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A total of $27 million is the amount Kenya’s largest mobile operator Safaricom has to pay to renew its operating licence for a further ten years.

The Communications Commission of Kenya (CCK) in 1999 issued Safaricom its first licence, which is set to expire on 30th June 2014. Today, Safaricom says it has over 17 million subscribers in Kenya.

Safaricom's licence, though, has a provision for a possible renewal for a further term of ten years.

But the CCK says the renewal of Safaricom’s licence depends upon the operator meeting minimum quality of service standards by June 2014.

At a media briefing at the CCK offices in Nairobi, the regulator’s director general Francis Wangusi said the renewed Safaricom licence is planned to come with a set of additional licence terms and conditions negotiated between the regulator and the mobile operator.

The CCK adds that the licence renewal fee of $27 million is based on the bid price offered for the third GSM mobile licence by the latest entrant to the mobile telecoms market in Kenya -Econet Wireless Kenya Ltd (now Essar Telecom Kenya Ltd).

The CCK director general acknowledged that Safaricom has contributed to the economy of Kenya.

Safaricom posted a record 47% jump in pre-tax profit to Ksh 25.5 billion for the year ending March 2013.

But Wangusi was nevertheless critical of the telco.

‘‘We have considered the fact that whereas Safaricom has met most of its licence obligations, its continued failure to meet the set Quality of Service standards remains a concern that needs to be addressed,’’ said Wangusi.

Wangusi added that the country’s three other mobile operators also have to pay the same amount for the renewal of their licences for additional ten year periods.

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