Building regulatory resilience

 

As part of our ongoing commitment to the SDGs, we continue to work with our regulators to provide universal and affordable access to all (SDG 9) reducing the digital divide (SDG 10). As a company we are also committed to ensuring that we are 100 per cent compliant with all applicable regulations and legislation (SDG 12).

Quality of Service (QoS) compliance register

We are committed to making a positive contribution to our industry and Kenyan society as a whole by operating within the boundaries of a fast-evolving regulatory environment. Our commitment to remain compliant calls for us to continuously expand our ecosystem engagement and build lasting influence with a growing number of stakeholders.

Several external economic, political and regulatory issues continue to shape and shift the regulatory landscape for Safaricom. The impact of these external forces directly impacts our ability to sustainably meet our business objectives, and provides definition in the way we hope to do business in the future.

To ensure that we remain compliant with regulatory requirements, we regularly assess our processes against all applicable laws and regulations on an ongoing basis. We also engage with our regulators proactively on all issues through a variety of channels (please see the Stakeholders section on page 56 of this report for further information regarding these important relationships.

Data Protection Act

A key highlight of the year was the introduction of new legislation around customer privacy. As a fundamental human right, privacy has become a key focus areas as technologies continue to evolve and demand for personalised data soars. Safaricom is committed to ensure that all customer data remains protected from misuse, and the company has adopted its own robust means of ensuring that global standards of data protection were proactively implemented. The Data Protection Act of 2019 was signed into law by the President of the Republic of Kenya in November 2019. The Act has introduced a set of customer privacy and personal information protection laws and established the Office of the Data Protection Commissioner to oversee and manage the rights of data subjects and obligations of data controllers and processors.

While the Act is still in its implementation phase and a new Data Protection Commissioner is in the process of being appointed, the Act represents a significant, positive step forward for the country. By legislating clarity and certainty regarding the collection and use of personal information, the Act will foster an environment of trust that allows innovation and progress to flourish.

Safaricom participated extensively in the engagement sessions during the public participation phase and we are satisfied that our views have been reflected in the enacted laws. We have also created a Data Protection department to review our processes and policies and ensure that we are compliant with all regulations in this regard (please see the Risk Management section on page 34 of this report for further detail regarding the department and its activities).

Network regulatory compliance

The Communications Authority of Kenya (CA) is mandated by the Kenyan Government to ensure that mobile network operators are delivering services of adequate quality. A new mandate for checking this performance was passed in 2018, when the Authority created a new Quality of Service (QoS) framework that aims to provide more robust measures of network availability in Kenya. The framework is has created a more decentralised gathering of information and employs the use of repeated testing to establish performance, which is an improvement on the previous methodology.

Accordingly, the CA tests every operator against a series of Quality of Service (QoS) measures it has developed. Operators that fail to meet any of these criteria are fined. The results of these tests are made public and published on the CA website.

New QoS measurement framework

In 2018, the CA introduced a new framework for the measurement of the QoS of Kenyan mobile networks. The framework is expected to be fully adopted over three years. During this transitional period, the CA has not levied or imposed any fines on mobile network operators.

We have been engaging with the regulator extensively regarding the metrics of the new framework throughout this transitional period.

The new QoS 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 per cent)
  • Quality of Experience (QoE) (using surveys to establish customer satisfaction with the performance of the network). As well as assisting the regulator to define the performance metrics, the industry has been involved in designing and weighting the qualitative indicators included in the QoE survey questionnaire.

Subscriber registration guidelines

Despite national SIM penetration levels of over 116%, more customers continue to join mobile networks in Kenya. In the awareness that SIM registration trends continue to shift, and with the objective of curbing SIM fraud, the Communications Authority issued Subscriber Registration guidelines for stakeholder consultation during the year. The guidelines enhance existing regulations, build more robust procedures and focus on curbing SIM card fraud. Safaricom in collaboration with other mobile network operators participated in a workshop with the Authority to discuss the provisions. Further, we made a joint submission to the Authority on behalf of all the operators. The regulator was receptive to our proposals and has incorporated the same in the revised guidelines.

Spectrum management guidelines

Spectrum is a national resource that is allocated by the Communications Authority via their mandate as provided for in the Kenya Information and Communications Act (KICA), 1998.

Current regulations state that spectrum can allocated to any licensed player, regardless of their customer size or intended use. In recognition of the fact that Kenya’s telecommunications space continues to evolve, the Communications Authority issued draft guidelines to govern the management and oversight of Spectrum usage and allocation in Kenya for public review. The proposed guidelines are set to enhance clarity and streamline the process for allocating spectrum. Safaricom alongside other industry players submitted their views for the consultation and are awaiting their feedback in the next FY.

Budget 2020 and the Finance Act

As part of our annual responses to the Budget and corresponding amendments to the Finance Act, we attended stakeholder workshops and made submissions through the Kenya Private Sector Alliance and the GSMA regarding our expectations on proposals for budget planning in the forthcoming government financial year. In partnership with the GSMA and other Kenyan operators, we published a report on the impact of tax policies on the growth of the mobile sector in Kenya. The report discovered the various elements that influence the growth of mobile networks globally, and recognised that the sector remains a key contributor for the Government of Kenya. However, striking the right balance between tax revenue maximisation, and incentivising investment and economic growth remains key for the sector’s continued growth.

Closing Access gaps around the country

As part of the initiative to use the Universal Service Fund (USF) to close access across the nation, we constructed and commissioned another three 2G-enabled Base Transceiver Stations (BTS) in underserved, remote areas during the year. The USF was created to support widespread access to ICT services and the ‘2G gap’ initiative aims to ensure that that there is mobile voice and data coverage in even the most inaccessible and isolated areas of the country. In spite of the onerous security and logistical challenges involved, we are pleased to report that we have commissioned 41 of the 48 sites to date.

Consumer affairs forums

During the year under review, we participated in three Kikao Kikuu forums hosted by the Communications Authority through the Government Relations team. Kikao Kikuu are forums hosted by the CA that seek to address consumers concerns relating to the products and services provided by ICT service providers. During the events, we responded and addressed issues emerging from our customers and supported the CA in creating awareness on various matters affecting the industry. Trust issues regarding data billing and network coverage in some areas around the rift valley were raised as two key issues by consumers during the forums.

Environmental compliance and management

We continued to undertake Environmental Impact Assessments (EIAs) and Environmental Audits (EAs) during the year. Part of our monitoring and evaluation of our environmental impact, we conduct EIAs on new and proposed infrastructural developments (from BTS to fibre optic network trenching) and EAs on our existing infrastructure. We undertook 437 EIAs during the year, including for all new sites prior to construction. We completed all 513 EAs scheduled, including control audits for sites for which we had received requests from communities neighbouring our BTS sites. We are satisfied to report that we maintained 100 per cent compliance to all applicable regulations and legislation during the year and that no fines were levied against us.

Looking ahead

  • We will continue liaising with the CA regarding the full implementation of the several critical new regulations, including the new QoS framework, spectrum management and SIM registration guidelines.
  • We create more opportunities for customer privacy and data protection awareness with key stakeholders.
  • We will continue to build on policies and processes to enhance child online protection for our business and stakeholders.
  • We will continue to retain an active role in collaborative advocacy action to promote ethics and integrity among all our stakeholders.
  • We will continue our response to the COVID-19 pandemic, liaising with the CA regarding additional spectrum requirements, the Central Bank of Kenya (CBK) in terms of mobile money services (the CBK increased the size of the wallet for M-PESA to KSh150K and the daily transaction limit to KSh 300k to reduce reliance on cash transactions), and the Ministry of Health in terms of potentially assisting with tracking and tracing infections.
  • We shall continue laying the foundations for favourable regulatory conditions as Safaricom explores new business products and services.