Service providers in Kenya’s Telecommunications Sector could essentially, be forced to break off mobile money divisions, from their core business if a new Bill is passed into law.
This possibility, is as a result of certain proposals in the Kenya Information and Communications (Amendment) Bill, 2019, which call for a new regulatory framework for Kenyan telecommunication service providers.
The Bill wants telecommunication companies to seperate their core business from other ventures and seek regulatory approvals for each of the ventures.
The Bill, states that; “A person may engage in any other business provided that such person shall; obtain the relevant licences from the respective regulators of any industry or sector ventured into; legally split or separate the telecommunication business from such other business; and provide separate accounts and reports in respect of all businesses carried out,”.
What this means is that Safaricom, Airtel and Telkom Kenya will have to separate their mobile money offerings (M-Pesa, Airtel Money and T-Kash respectively) from their core telecommunication activities to create new companies with separate accounts regulated by the Central Bank of Kenya.
The Bill if approved, gives telcos just six months from the date it is signed into law to effect the separation.
This will have a huge impact particularly, on Safaricom that has in recent years launched offerings in mobile lending, e-commerce, health, education and agriculture, among others.
The Bill has been proposed by Gem Member of Parliament Elisha Odhiambo and is the second attempt to have Parliament introduce legislation to break up ventures by telecommunications service providers.
Mr Elisha Odhiambo, appears to have taken over the Bill from his Gem predecessor and former Minority Leader Jakoyo Midiwo, who made an unsuccessful attempt to have the law passed in the previous Parliament.
The MP says the Bill has been gazetted, adding that he is prepared to present it to the floor of the House in the coming days.
This is coming after the Communications Authority of Kenya (CA) allegedly abandoned a contentious report on dominance in the telecommunication sector.
The Communications Authority of Kenya, paid UK-based consultancy and research firm Analysys Mason 30 million Kenyan Shillings in 2016 to conduct the study, with the authority promising to publish it within the year.
The report has however since been hit with delays and several contentious parts redacted.
According to The Standard, Analysys Mason had recommended separating M-Pesa from Safaricom, a finding that was dismissed by Information, Communication and Technology Cabinet Secretary Joseph Mucheru.
The Bill also prescribes a new reporting formula for the Communications Authority of Kenya, and seeks to expand the Universal Service Fund beyond the rollout of network infrastructure.
The Bill proposes that; “Two percent of the fund shall be used for increasing access to telecommunications and advanced services in schools, libraries and rural health care facilities,”.
Other proposals include 10 per cent for furthering the other objectives of the fund as the commission may determine, as well as 10 percent for ensuring increased nationwide access to advanced telecommunications services.
Telcos, will also have to make a refund of 10 Kenyan Shillings worth of airtime to their subscribers for dropped calls. This is an effort to further improve the quality of service in the sector.
