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Communication Authority rakes in Sh9 billion in revenue

Communications Authority Director-General Francis Wangusi

Communications Authority of Kenya (CA) raked in Sh8.7 billion in revenue in the 2015/2016 financial year, making it one of the highest earning government regulators in the country.

The bulk of the authority’s income that saw a 20 per cent increase compared to a similar time the previous year came from spectrum fees as mobile service providers make upgrades on the existing 3G and new 4G networks.

Directors’ expenses

“The authority earned a total of Sh8.73 billion in the 2014/15 financial year against a budget of Sh8.2 billion, resulting in a favourable variance of Sh514 million,” said the Francis Wangusi-led telecommunication industry regulator in it’s annual report released yesterday. Of this, spectrum fees accounted for 65 per cent (Sh7.76 billion) of the total income earned.

“This performance represents an increase of 20 per cent compared to the previous year where income generated was Sh7.26 billion and was mainly attributed to an increase in annual operating licence fees that grew to Sh2billion from Sh759 million in the previous financial year.”

The regulator further doubled the payout to its executives, with directors’ expenses rising by more than 100 per cent from Sh28 million to Sh74 million recorded in the previous financial year.

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National Treasury will be earning Sh1.7 billion in corporate tax from the earnings, making the CA one of the richest regulators in the country with total cash reserves sitting at Sh10.2 billion as at June 30, 2015.

Network licences make up the bulk of operation costs for telecommunication service providers. In the last financial year, leading mobile subscriber Safaricom paid Sh9.7 billion on spectrum, M-Pesa and link leases, up from Sh8 billion recorded in the previous year.

Exited market

The payment of the levy has been a bone of contention in the past. In 2015, Airtel Kenya, the second largest mobile operator, protested the payment of a Sh2.1 billion spectrum renewal fee. It had argued it was exempt from the payment after acquiring the licence of Easar’s YU Mobile, which exited the country two years ago. 

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