Bharti Airtel: Our Investment in Kenya is Threatened by the Current Regulatory Policies
Airtel Kenya is not very happy about the current situation at the CCK where regulatory policies are not being honoured. The company’s CEO, Shirvan Bhargava, has issued a strong statement citing many actions and in-actions from CCK which are affecting the operators.
Read statement below;
We wish to express our disappointment at the recent events which have led to disruption and serious delay in implementing the formally announced MTR Glide Path and urge for a full review of the major factors contributing to the delay in the implementation of policy matters by the industry regulator, the Communications Commission of Kenya (CCK) which continues to affect the seamless delivery of quality and affordable services by the mobile network operators (MNOs) to the benefit of the industry and the consumer in Kenya today.
We have trust, respect and confidence in the CCK as an independent and competent body able to address the regulatory issues in its mandate as provided in law. We strongly believe that the CCK should be offered full support and autonomy in setting regulatory policy and in its day to day operations to the benefit of Kenyan consumers
As investors we are fully committed to Kenya and would appreciate stability in policy making to facilitate the planning of our investment program.
Our plans are to continue to work together with the Government and the Regulator towards the acceleration in the achievement of the Vision 2030 goals that seek to offer the Kenyan population access to affordable telephony and internet services including the increase in mobile penetration, infrastructure development and the acceleration in internet and email access in order to drive GDP growth.
We have made all our decisions to enter this market and make significant investment on the basis of the conducive investment climate and fully liberalized telecommunication sector that pertained two years ago and this included, the government promise that the MTR glide path as professionally determined, would be fully implemented.
The company has invested over Kes8.5 billion in support of network expansion in urban and rural Kenya for voice, internet services and mobile commerce during the last two years including the launch of Airtel Money and the state of world class 3.75G data network. This investment, coupled with the affordability model has played a significant role in the increase in mobile penetration in Kenya wish currently stands at 70% up from 40% two years ago.
The basis of these investments was on the promise of consistent regulatory policies especially the MTR glide path adopted by the government.
Our increased investments and product innovation have played a significant role in improving the industry quality of service and product offering to the Kenyan consumers by taking the competitive landscape a notch higher, challenging our competitors to offer more value to the consumers who now continue to receive world class service at more affordable prices than ever before.
We are however disappointed that the CCK and its Board is unable to adhere to the agreed policies that form the basis of the investment and business plans for Airtel Kenya citing the inference by the state in the implementation of its polices. The apparent interference in the implementation of industry policy, and instances where the policy is implemented in favor of certain operators is impacting negatively on our company’s ability to deliver on its commitments to its consumers and to its shareholders.
Our disappointment is more so because the regulation of interconnection rates was an initiative of the CCK with the intention of driving consumer welfare, increasing access of telephony services to the majority of Kenyans and improving the competitive landscape, by ensuring that the rate operators paid for interconnection was as close as possible to the actual cost.
Our concern is driven by the fact that this non adherence to the determined glide path will delay the achievement of the objectives set above, denying the Kenyan consumers the opportunity to enjoy affordable quality services from the operators. It will also slow down the acceleration of mobile penetration that is clearly.
The Kenyan consumers remain the biggest losers in the delays and lack of clear policy and implementation in the sector. This is especially because the lower MTR rates have ensured that there is more competition in the market, with MNOs offering better value in the form of wider range of choice and product and service offerings to the consumer in both voice and data with a tremendous positive impact on the industry.
We hope that the commission will gain the necessary support from all industry stakeholders and the government to ensure a free hand to deliberate and reach an independent decision to revert to the approved Glide Path in the interest of the development of the industry and the economy and for a better overall quality of service and affordable experience for the Kenyan consumers.