REGULATORY ENVIRONMENT
NAVIGATING THE REGULATORY UNIVERSE
A sound regulatory system is crucial for supporting the growth of our industry. It provides an enabling environment for competition between businesses and enforces fair practices, driving equal opportunity and the inclusive participation of all segments of society in the economic and social spheres. We ensure that we remain compliant with regulatory requirements by assessing our processes against all applicable laws and regulations.
In the year under review, we successfully completed the automation of our compliance returns process. We also have updated our comprehensive archive of the laws and regulations that impact Safaricom.
THE DATA PROTECTION BILL AND POLICY
Data protection is an important topic the world over, and two Data Protection bills are currently under consideration in Kenya which, if enacted, will guarantee the protection of customers’ privacy. We participated in stakeholder engagements to discuss both and provided input into their development.
We have reviewed and developed our data security and protection policy in line with the European Union (EU) General Data Protection Regulations (GDPR), as well as the proposed Kenyan legislation, which governs the management of data going forward.
THE FINANCE ACT
The Finance Act 2018 was gazetted on 21 September 2018. Sections of this legislation that affect our business include:
- A telephone and internet data services excise duty increase from ten per cent to 15 per cent, impacting the cost of our voice, SMS and data services.
- Excise duty on M-PESA transaction charges maintained at 12 per cent, following an increase from ten per cent in the initial Finance Bill proposal of June 2018.
MEETING THE REQUIREMENTS SET BY NETWORK REGULATORS
Our regulatory team supports the network by assisting in the management of key performance indicators (KPIs) related to our network license conditions including spectrum, number of resources and quality of service. Like all mobile network operators (MNOs), compliance with our network license obligations is assessed from the perspective of quality of service (QoS), measured by the Communications Authority. In the past we have been penalised for our quality of services as assessed by the CA’s QoS methodologies.
A NEW QUALITY OF SERVICE FRAMEWORK
The new framework for measuring Quality of Service (QoS), introduced by the Communications Authority, was operationalised on 1 July 2018 and is expected to be fully adopted over three years. In FY19, the authority launched new monitoring equipment for more accurate measuring of end-to-end performance, as well as a supplementary questionnaire. The new QoS framework, which has not yet taken effect, will increase the scope of parameters to be measured, as well as scrutiny of our call quality and customer satisfaction levels. The new framework has three key focus areas: network performance (measuring stability and availability using data automatically submitted from operator systems); end-to-end quality of service (measured through drive tests and walk tests, where the threshold is 80%), and Quality of Experience (QoE) (using surveys to establish customer satisfaction with the performance of the network).
At the time of going to press with this report, the CA had not levied or imposed any fines on Safaricom.
In FY19, we constructed 38 additional Universal Service Fund (USF) sites, which are currently active on the network, and we are in the process of handing these over to the Communications Authority. Under the USF initiative, these sites were rolled out in some of the most remote parts of the country to provide broadband coverage to marginalised Kenyans, including in areas that may not be financially viable for the business. We were commended by the Communications Authority for the timely completion and high quality of these sites.
In 2018, the Communications Authority of Kenya contracted Safaricom to set up base transceiver stations (BTS) in 78 remote, underserved sub-locations across the country as part of a KSh 1.2 billion deal to boost network connectivity.
