ICT Africa Headline News

Kenya Issues Deadline for USF Contributions

01 August, 2014

Source: The Star

By Constant Munda:

MAJOR ICT sector players face unspecified penalties unless they remit 0.5 per cent of their annual revenue to the Universal Services Fund that was created in 2009 to expand infrastructure in remote areas.

ICT Secretary Fred Matiang'i yesterday warned companies to pay up outstanding dues for the financial year ended June 30,2014 by end of next month.

Matiang'i could however not specify actions in case of failure to make the the contributions saying "the relationship between the regulator and network operators is protected within certain frameworks of institutional respectability".

Communications Authority of Kenya said it had, by June 15, received a mere Sh45 million out of targeted Sh1 billion from "about 500" licensed companies since it issued invoices last October.

"The agencies that are late to make their contributions for the last financial year have 30 days from today (yesterday) so that we can move on because we are supposed to receive new contributions for this year," Matiang'i said when he inaugurated the Universal Services Advisory Council and the Communications Authority of Kenya boards.

"We understand the delay because we also took time to put in place the Universal Services Advisory Council which is now place," he said.

The CA expects the fund to start off with Sh2 billion after it deposited Sh1 billion into the fund's account as seed capital fours ago.

Director general Francis Wangusi said only France Telecom majority - owned Orange had paid up among the "major players" - the four mobile network operators and broadcasters.

He said accumulated arrears to USF would accrue interest depending on time taken to settle them, "the same way it works when you fail to pay a debt".

"If we found they cannot voluntarily contribute, we shall take legal action to collect that money," he said. "There are also a set of other penalties that we want to put in place to ensure they contribute."

Safaricom alone is expected to contribute Sh723.5 million going by its Sh144.7 billion earnings for the fiscal year ended March 31, 2014 but the region's most profitable company has been reluctant to oblige.

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