New tax to pay for internet speed

InternetPlayers in the local ICT sector would begun contributing to the Universal Service Fund since July in a move meant to intensify the penetration of mobile and internet services in the country.

Communications Commission of Kenya (CCK) licensees will be required to remit 0.5 per cent of their annual revenues as the fund finally starts after more than two years after it was created through an Act of Parliament.

The delay was caused by the failure of Information minister Samuel Poghisio in naming a board to run the fund and also due to disagreements among major players on how it should function.

But, CCK said that most of the issues have been settled, and a consultative meeting is likely to take place after the March 4 General Election to achieve a full consensus between the regulator and operators.

The CCK director general Francis Wangusi said that they had tried their utmost to solve those outstanding issues, and they are prepared to start collecting the levy in July this year. They have planned a meeting with the industry stakeholders to iron out all the details of the project, but they are required to start giving their contributions.

The new levy is meant to expand the reach of modern information and communication services to remote areas that market players do not consider to be commercially viable.

The fund would be administered by an advisory council that has been charged with making decisions about which projects would be given priority.

Mobile operators, while agreeing on the importance of contributing to the Universal Service Fund, have remained divided over the question of how the money should be utilised and the composition of the council to administer the fund.

While only yuMobile has so far committed to start remitting its contribution to the fund in its current form, other operators have cited concerns which they say must be resolved before they can participate.

yuMobile chief executive Madhur Taneja, in a statement, said that they supported the decision and would contribute the relevant tax when applicable.

But the other operators, although are in agreement with the idea behind the Universal Service Fund (USF), maintain their stand that a few concerns have to be settled before they can begin contributing.

At the top of the list of demands is a direct representation on the advisory council, the decision-making body of the fund. As contributors, they are of the opinion that they should have a say on which projects receive priority funding.

Safaricom corporate affairs director Nzioka Waita said that in the present condition there was no industry involvement in the administration of the fund. They would also like to know beforehand what the regulator intends to do with the fund and what projects will receive priority.

But, Mr. Wangusi last week insisted that the commission had given the players a chance to forward names of the nominees for the advisory council, but the positions were limited.

Mr. Wangusi added that they had written to the licensees a long time ago to forward names and CVs of their nominees to the council, but most of them had delayed in sending the information. No one should complain that they were not given a chance to be represented on the board. The CCK had nothing to conceal and everyone understood the purpose of the fund.

He also said that the CCK was considering creating an oversight committee comprising of representatives of all the licensees to keep a watch over the decisions of the advisory council and monitor how the fund would be used.

Mr. Wangusi also said that they would be suggesting that the mobile operators and all the other licensees should come together to play an oversight role. That was important as they would be positioned to ensure that the fund was being deployed to the intended purposes.

The tax would be applicable to all licensees in the information and communications sector including mobile operators, broadcasters, internet service providers and postal/courier service providers.

The fund would be part of the strategy Kenya was employing to fulfil the objectives of the five-year national ICT master-plan that was launched last week. The road map visualises connecting every Kenyan household to high speed and affordable Internet service by 2017.

It also projects that more than 500 new companies would have been registered in the sector in Kenya with more than 50,000 jobs created in the ICT sector as the country is transformed into a middle-income society.

Under the new scheme, the Universal Service Fund would serve the purpose of spreading connectivity to remote parts of the country providing the possibility of accessing government services online.

Image courtesy: FreeDigitalPhotos.net

Leave a Comment

Your email address will not be published.

You may also like

Growing a Business

Want Great Guidance ? Find yourself a Super Mentor


They are the gods of small businesses, those inspired individuals who have achieved the highest levels of success. They can be the shining beacons who light up the path of running your business with their vision, wisdom and wealth of resources and contacts. They are The Mentors.

If you are fired with the passion to take your business to great heights, the best thing to do is find yourself a super mentor. Here are some tips to help in your quest

Pinpoint your Need

Sit down and focus your thoughts on your business growth strategy. Which area of the business needs a lift. Is is staffing, is it the finances, is it the production, is it the your lack of customers or is it the business as a whole that needs a makeover. Once you’ve zoomed in on the sore spot, this is where you need…

Read More
Growing a Business

Dreaming Big? You can Move Mountains with these Business Productivty Tips


You may be full of admiration for some people who seem to manage themselves and their work so usefully and efficiently. They seem to fit in so much productive work into the same number of hours which everyone has.. Let’s look what makes them tick and take a few tips.

Learn to identify your most productive hours

Its true, most productive people know which time of the day they can be most creative and efficient. They identify and allot these hours for the best part of their work. This way they are able to give their 100% awareness to the job and business productivity.

Early to rise- A winning habit

Waking up early is a personal habit that has all the plusses on its side. You need not necessarily go to work that early. It’s a habit that gives you more time for personal care, like mediation, exercise, walking,…

Read More
Growing a Business

Leadership Qualities that can make you an Icon


You may have reached the leadership position through sheer dedication to performance and a do or die attitude . Now that you are at the top, your viewpoint needs to change. You have to now be a role model, one whom others will look up to and follow. Here are some tips that can shape your leadership and management skills

Be Competent: Employees will look up to a leader who has good industry knowledge and management skills. If you do not possess these skills you should surround yourself with knowledgeable people who can offer good counsel. Competence is a trait all employees will admire.

Be Trustworthy: No one will look up to a person they cannot trust. Your employees will want to rely on you and count on you. In difficult situations, leaders are expected to apprise their employees of the situations and find solutions on how to address…

Read More
Raising Money

Are You offering Your Services Using the Right Pricing Strategies?


In these times of fierce competition, business people , mostly those that offer services and belong to the service based industry, are finding it a challenge to implement the right pricing strategies. It is virtually a struggle to set the right business price that will retain and attract the customers, and not drive them away. Follow these tips, the crucial dos and don’t s and you may be in a much better position to offer your services at the best price.

Maintain your Business identity and Dignity

If you are offering a unique or special product or service, don’t underrate it just because you want to build a better relationship with the customer. This will just cheapen your offering as another run of the mill. If its something special you are offering the customer, then communicate this fact to the client and get the equation right with the most…

Read More
Raising Money

What is a Fair Wage? How Do you Assess Fair Wage?


How do you figure out a fair wage?

This is a very common question for startups and small businesses. They can’t seem to decide or understand how to set wages and manage reputations at a time. They are determined to pay well but they also have to think about encouraging their employees to stay with them for a long time. This is why there is a need to think strategically.

Listed below are a few expert tips to help you decide:

Don’t Focus Only on Money

Money should never be the main focus for you or for your employees. You should decide on the wages in such a way that your employees are tied to your business. When your business does well they should be able to taste that success and vice versa.

Also, think about additional perks such as exclusive benefits and time off. Many employees value this more than the overall…

Read More
Raising Money

Tips to Winning Hard Negotiations With Ease


While some negotiations are easy, others are quite hard to win. If you stumble you will lose.

Whether it is a potential client or an investor, negotiations can be very tough and frustrating. The problem is that the moment you let your frustration overwhelm you, you will lose the deal and you will give in to whatever is being offered to you. In order to avoid that, here are tips to overcome tough times and to win even the hard negotiations:


Know your opponent as well as possible. This is the rule no matter what you do. You should understand your opponent to the T. Who the person is, what his culture is, what he thinks, what he stands for, how is his network, etc. are the questions you should ask yourself and answer through research before meeting up for the negotiation. Understanding the opponent will give you a great advantage.


Read More