The Communications Commission of Kenya (CCK) has adjusted license and spectrum fee across the board in the first license and spectrum fees review in more than ten years. The last review was done in 2000. The new rates will take effect from 1st July 2012. Acting CCK Director General, Francis Wangusi says the review is meant to stimulate ICT infrastructure and growth, especially in under-served and un-served areas, particularly Nothern Kenya.
Wangusi also said that the reviews seek to align CCK rates with those of the other four East African community member states. CCK has also committed to reviewing the rates every 3 Years. Annual operator fees are usually pegged at 0.5% of an operators revenue or at a fixed fee for smaller operators. Such fees go towards CCK operation costs. "Initial license fees on the other hand are used, among others, to control market entry by, ensuring that only serious players enter the market. Proceeds from initial license fees are normally forwarded to the Treasury, " says Wangusi.
In the new fee structure, Mobile wireless access fees used by mobile operators go down an average of 41%. This includes a 25% reduction on fee charged for the first 10,000 transmitters put up by an operator, 50% for next 30,000 transmitters and 75% for remaining transmitters. Various fixed links used by mobile operators to interconnect transmitters have also seen an average 24% reduction.
In addition a geographic zone factor of 50% had been introduced to encourage roll out of transmitters in North Eastern, Nothern and Noth Western Kenya, areas which have a low density of transmitters. Fixed wireless links see a minimum fee of KSh 240,000 per 1 Megahertz of assigned frequency. This notable increase comes after many complaints of frequency hoarding. The fee is meant to discourage holding of idle frequency with mobile operators been the target of such hoarders.
Fixed wireless transmitters maintain current charges for first 50 transmitters, 25% reduction for next 50 and 50% for remaining transmitters. Average reduction is 18%. Broadcasting stations maintain current fee, other than community and public broadcasters who will enjoy lower rates. North West, Northern and North Eastern Kenya also see a geographic zone factor advantage of 50% to encourage coverage.
Additionally, all broadcasters will be required to renew their licenses by 15th November 2011. Terms include 22 conditions as CCK moves to enforce regulation of the sector, including spectrum acquisition and use. Commercial license fees for applications have been reduced from KSh 10,000 to KSh 5,000 in a bid to encourage startups.
Postal and courier service operator fee have been reduced for purposes of East African Community harmonisation. The Public Postal Licensee will pay KSh 1 Million for a 25 year license down from USD 50,000.
ICT service operators will now pay 0.4% of their revenue as fee down from 0.5%. Flat rate fee for small operators remains the same as the current one. Type approval fee see a reduction of 80% from current charge. All telecommunication equipment sold and used in the country requires type approval. The reduction is meant to encourage compliance in a bid to stamp out sub standard equipment.
CCK clarified that Safaricom was yet to be determined as a dominant operator hence did not need to inform the regulator of recent price hikes. The interconnection fee, which determines the minimum networks can charge for cross network calls remains at KSh 2.21 for 12 months longer than initially planned, before resuming a downward trend again. This was after the president intervened on the, matter after complaints from some mobile operators.
The full press briefing and the rates table is available here.