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Thursday, January 29, 2015

MEDIA HOUSES WANT 4 MONTHS TO SET UP BEFORE DIGITAL MIGRATION

Lawyer Paul Muite has said a consortium of three media houses need 4 months to bring in and set up digital transmission infrastructure and set top boxes.

By then, the global deadline for migration will be here...June 17.

Muite stated this at the Supreme Court in front a seven man bench that convened a status conference to assess compliance with orders it has issued late last year.

If true, the statement casts serious doubts on the claims by the three that they had invested Sh40billion or thereabouts on digital migration.

The contradictions continued with Muite claiming that a move by the Communications Authority to repossess frequencies granted to the consortium for digital signal distribution would undermine their efforts to set up as the transmission equipment needed to be synochronised with those frequencies when ordering.

This would seem to suggest the three have not even ordered the equipment unless counsel was being dramatic.

The consortium has continuously lost ground in the argument against digital migration proceeding with the latest setback being the move by CAK to finally crack the whip.

They have repeatedly dragged on the process when they could have used the time to bring in the equipment instead of fighting it in court.

A recent move to bring CAK, Startimes and Media Editor;s Guild members to debate the issue saw CAK boss Francis Wangusi emerge with flying colours as he met every argument raised by the media side with facts.

As he pointed out, even when the three were given the opportunity to bid for a BSD license, they could not even put up a bid bond and their tender proposal.

The case will be heard next week as yesterday's was only a status conference on the directive issued by the same court last year.


Thursday, January 22, 2015

WHATSAPP WEB VERSION RELEASED TODAY - 3 EASY STEPS

Bad news for iPhone users, you are not included. Whatsapp today deployed a web version that is seen as the likely killer of traditional SMS and especially bulk SMS business.

With the new version of Whatsapp, a feature called Whatsapp web has been added while a web version you can use on your laptop has been launched.

To use it, you have to link your phone Whatsapp with the web version.

These are the three simple steps to doing it:

1. Go to this link..  https://web.whatsapp.com/

2. You will see a QR code, something that looks like this
3. Go to Whatsapp on your phone and go to the menu

4. You will see an item named Whatsapp Web

5. Click on it, it will open a QR code reader..basically the camera set to read the qr code

6. With the qr code reader open scan the qr code on the computer screen.

7. You should be connected to WhatsApp Web and you can now begin using the web version. It remains on so long as your phone WhatsApp is on.

Available for:

Android, Windows Phone, Blackberry, Nokia Symbian series. No version for the iPhone yet.

Wednesday, January 21, 2015

AUTHORITY REPOSSESSES NTV/CTV/KTN FREQUENCIES, BANS THEIR DECODERS, CALLS COMPETITION AUTHORITY


Fed up with three media houses that have delayed the digital migration process and abused their outlets to slander rivals GOtv and Startimes, the Communications Authority has cracked the whip; withdrawn the license of the three media houses to transmit digitally, halted the issuance of a digital signal distribution license to them and asked KRA to prohibit any importation of set top boxes by the three media houses.

CAK has also invited the Competition Authority to investigate cartel-like behaviour displayed by the three media houses citing their refusal to air digital migration information including from the authority itself on their channels.

The die appears to have been cast with the decision by the three to air a Johnson Mwakazi voiced advert cautioning viewers from buying decoders from GOtv and Startimes and advising them to instead wait for decoders the consortium under their Africa Digital Network banner would be importing.

CAK Director-General Francis Wangusi, in a tough statement to the press pointed out that ADN has not been licensed to sell any set top boxes in Kenya.

It also noted that the advert which was finally stopped by court order yesterday, was meant to confuse the digital migration programme with misleading information.

This would appear to be the final blow to the consortium's continued delay of the process as the court litigation and regulatory process now turn against them.

Not only do they have the advertisement case hanging over them, they will now be subject to a probe by the Competition Authority which almost certainly they cannot win, they will need to go back to the CAK to seek license to transmit and the frequency allocation, they have to submit set top box samples and await the approval process and cannot be sure they will be granted the license to distribute the digital signal as a group.

Below, see CAK's full statement:

PRESS STATEMENT BY MR. FRANCIS WANGUSI, DIRECTOR GENERAL, COMMUNICATIONS AUTHORITY OF KENYA (CA), ON THE ADVERTISEMENT BY NATION MEDIA GROUP, STANDARD GROUP AND ROYAL MEDIA SERVICES, RELATING TO MEDIA TRANSMISSION SERVICES
21ST JANUARY 2015
It has come to the attention of the Authority that three media houses, namely Nation Media Group Limited, Standard Group Limited and Royal Media Group Limited have jointly been running a misleading advertisement on Television and Radio since Friday 16th January 2015. The said advertisement purports that Startimes and GOtv are illegally carrying their content thereby infringing on copyright and neighbouring rights. The advertisement goes farther to instruct consumers not to purchase Startimes and GOtv pay-tv set-top boxes to watch CITIZEN Television, NTV, KTN and QTV. In addition, the advertisement allege that the three media houses are the exclusive vendors of Free-To-Air set-top-boxes that can enable the public to view their channels
The Authority is gravely concerned by the misleading content in the advertisement and wishes to advise the industry and the general public as follows:
1. The advertisement by the three media houses is misleading to the public, is offensive to the market. It is equally in gross violation of the legal and regulatory framework governing the sector;
2. The tone of the advertisement, its content and timing is intended to cause confusion and disrupt the digital migration programme;
3. The digital migration framework allows for the distribution of the ‘Free-to-Air’ signals on the digital platform under the “must-carry principle” . This was supported by the ruling of the Supreme Court of Kenya in September 2014 . It allowed for the availability of Free-to-Air channels to the public through all set-top-boxes (FTA and Pay TV). The advertisement dissuading consumers from purchasing set-top-boxes from other suppliers approved by the Authority is therefore misleading to the public and portrays anti-competitive conduct by the three media houses. Consumers need not be constrained to purchase a specific set top box to view the content of the three broadcasters whose content is Free-to Air;
4. The Authority has type-approved more than 65 set top boxes which are available in the market today. GOTV and Startimes set top boxes are duly type-approved by the Authority and are therefore authentic decoders in the local market authorized to carry the Free-to-Air Channels of the three media houses under the auspices of the “Must Carry Principle;
5. The sale of set top boxes in Kenya is a free market. Consumers can purchase type approved set top boxes from any vendor registered by the Authority. The full list of approved set top boxes and registered vendors can be freely accessed on the Authority’s website;
6. The Authority has neither received any application nor granted any type-approval of any set top box model from the three broadcasters, individually or collectively, for sale in Kenya. It is therefore illegal to purport to advertise set-top-boxes that have not been type-approved by the Authority;
7. The Authority has also received a formal complaint from Gotv and Startimes that the three media houses have refused to Air their digital-migration related advertisements which is potentially an anti-competitive conduct prohibited by law. While this complaint has not been investigated, the Authority notes with concern that it has itself been a victim of such refusal to carry advertisements both in the electronic and print media owned by the three media houses, yet the advertisements are aimed at educating the public on digital migration.
In view of these gross violations by the three media houses as enumerated above, the Authority has decided to take the following administrative actions:
1. Withdraw the temporary authorization granted to the consortium by the three media houses (under the consortium identified as Africa Digital Network). Subsequently the Authority shall reposes the frequency spectrum resources allocated with immediate effect;
2. Decline to continue with the process of issuance of a Network Facilities Provider Tier 2 License for self-provisioning to the three media houses, pursuant to Gazette Notice Number 9088 dated 19th December 2014. This is on account of the above violations of the legal and regulatory framework. The process shall therefore await the ruling and determination of the Competition Authority of Kenya and the Board of the Communications Authority of Kenya on the violations by the three media houses.
3. Liaise with the Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (KeBS) to bar the importation of set top boxes by the three media houses considering the purported set top boxes are not type-approved by the Authority; and
4. Invite the Competition Authority of Kenya to investigate the cartel-like behavior and anti-competitive conduct and take appropriate regulatory remedies.
We further wish to inform the public that registered vendors have in stock different models of approved Free-to-air and Pay-TV set top boxes that are readily available locally for purchase. More than 1.2 million set top boxes have been purchased since migration in Kenya began. At the moment, the market has more than 1.5 million set top boxes in stock. As we progress into the second phase of the analogue switch-off in the country, consumers are encouraged to purchase set top boxes of their choice ahead of switch-off in order to enjoy digital television.
The withdrawal of the temporary self-provisioning authorization granted to the consortium and the repossession of the the allocated resources does not in any way prejudice the availability of the services of the three broadcasters. The broadcasters are at liberty to avail their content on the digital platform through the existing licensed Broadcast Signal Distributors.
Let me reiterate that the Authority does not condone contraventions of the Act by any of its licencees. The Authority will continue to execute its regulatory mandate with a view to ensure successful migration of Kenyans from the analogue to the digital platforms and ultimately for the growth of the ICT sector in Kenya.
Issued on 21st January 2015

Saturday, January 17, 2015

CAK BACKS GOtv IN SUING NTV/KTN/CTV SAYS AD IS "ACTIONABLE"

The Communications Authority of Kenya has termed an ad by three TV stations "misinformation" and said GOtv and Startimes have a right to take the media houses to court over the same.

The three media houses have been in protracted court battles to delay digital migration until government decided it was going ahead to implement the switchover anyway.

The three claim GOtv and Startimes are carrying their channels illegally and cautioned viewers from purchasing their set top boxes. Instead, they want Kenyans to wait for their own decoders which they are bringing under the Africa Digital Network consortium.

GOtv has said it will move to court to seek redress over the advert.

"The latest infomercial is not only defamatory of GOtv, misleading to the public but also
contemptuous of the court finding stated above. GOtv shall move to court for appropriate redress."

CCK Corporate Affairs Director Mutua Muthusi said GOtv were right to seek court intervention.

"That is actionable in court," Muthusi said. He said CAK had warned players over misinformation and said media houses should advertise their boxes without misleading Kenyans over rival products.
 "I think even under advertising rules it is not allowed," he added.

GOtv in a statement to the press said it carried the three media houses channels under the stipulates of the Kenya Communications Amendment Act.

"GOtv and others air local TV content (including NTV, KTN and Citizen) pursuant to a ‘must carry’ obligation imposed by Regulation 14 (2) (b) of the Kenya Information and Communications (Broadcasting) Regulations
2009, whose objective is to ensure that the public has access to information."

GOtv and Startimes have been in the market for a while and have sold thousands of boxes to the extent that they are among the top Lipa na MPESA transactions movers according to Safaricom.

Startimes had not issued a statement as of Saturday evening.

A sustained campaign over the December period has seen the number of decoders sold rise sharply leaving media houses with a steep hill to climb to sell their boxes.





CITIZEN, NTV, QTV FACE VIEWER BACKLASH AFTER NEGATIVE AD

"We did not buy GOtv to watch your boring channels" KOT

Kenyans on Twitter reacted negatively to an advertisement by the three media houses fighting digital migration, NTV, Citizen and KTN with many saying they would go ahead and buy pay-TV set top boxes.

In the ad that aired on their respective TV stations, the media owners cautioned Kenyans against buying GOTV and Startimes decoders and asked them to wait for decoders that their consortium is importing.

Not only is this inaccurate but it is also tantamount to slander by suggesting that a legitimately licensed business that has invested millions of dollars into the country is somehow fleecing consumers.

Businessmen who have purchased the GOtv set top boxes complained that the advert would hurt their business and termed it illegal.

GOtvKenya

Dear Gogetter be advised that content airred of GOtv platform is legal and legitimate. - the official GOtv twitter handle wrote.

" What's the point of having 2 decoders and why wait until these time to tell Kenyans not to buy star times and gotv decorders?" BasilShuiki posed on Twitter.

"@KTNKenya @ntvkenya @citizentvkenyaYou can't force us to buy your decorders."  @KaruguMureithi

"Very selfish of them "@Moseax:#BuyersBeware Citizen tv, Ntv, ktn & Qtv will not be showing on startimes and Gotv digital boxes!?" @Nifabulaz added also on Twitter.

"What the hell with KTN , NTV , QTV & Citizen. We are not duped purchasing Gotv n Startimes setbox, u dragged your feet on digital migration." "Josphatkaranaj1 wrote in dismissal.

Set top box vendors who have also invested in buying the decoders were also fuming.

"@RobertAlai so sad!! Am a Gotv Vendor with 150 decoders on stock, and then this happens. Its illegal," @SyokiKagz said.

Some contributors used flowery language to dismiss the advert.

"@KTNKenya @ntvkenya @citizentvkenyayou mofos think we bought GoTv to watch ur boring channels..... Football bitches....football," "Christian_Splif wrote.

"@ntvkenya I will continue with Gotv, stay with your local channels full of Soap Operas and useless politics. With gotv I watch quality shows" "Fredengosia wrote.

"Height of hypocrisy: @KTNKenya , @citizentvkenya , @ntvkenya ~they refused digital migration~ now they r forcing us to buy their decoders..." @GGpeterAtom wrote.
GOtv in a statement issued to newsrooms refuted the claims of the advert and termed it contemptuous of a Supreme Court ruling.

It promised to take the media owners to court to seek redress.


Friday, January 16, 2015

WIDESPREAD BLACKOUT AS OVERLOADED NAIROBI NORTH LINE TRIPS


This image has everything to do with why the country suffered a power blackout last night.

This is the Suswa  power substation under construction. It is supposed to be the first port of call for power generated from the Ol Karia geothermal fields

It is also supposed to have been completed and connected to the power lines from Ol Karia but it has not.

The pylons, coming from Ol Karia have been held up at the highway as locals demand compensation.

As a result, Kengen did power stations that are now injecting an additional 280Megawatts into the national grid but the lines to evacuate that power are not yet in place.

So, it has been left to the old Nairobi North line to attempt to carry that power alone. Nairobi North is itself supposed to make a stopover at the Suswa substation through what is called a loop-in line.

From Suswa, power is to go to the Isinya substation also under construction and connect also to the Mariakani-Embakasi line also stalled owing to disputes in Kajiado.

Last night one of the two cables on the Nairobi North line tripped meaning the other one had to carry all the power and this overloaded it causing the "circuit break" that resulted in the blackout.

The Suswa line needs to be resolved soon. More power plants are coming up at Ol Karia.

The Loiyangalani line from Lake Turkana Wind Power project is also supposed to land at Suswa bringin in 300MW of power.

The Ethiopia-Kenya high voltage DC line is also supposed to land at Suswa bringing in up to 2000MW of power.


Here the three lines shown include -- to the left, the Nairobi North line, Ol Karia 2 line, right, the Loiyangalani line.

Thursday, January 15, 2015

IBM MOVES INTO JOGOO HOUSE - WILL RUN NATIONAL SECURITY DATABASES

IT services firm IBM has moved personnel into Jogoo House where it will analyze data and images collected by Safaricom's Police network which is set to be completed in May.

The global giant is expected to carry out analytics as Safaricom's mandate is to merely build the network to collect surveillance data and communicate within the network.

Financial details of the IBM contract have not been made public but it is likely to be a lucrative one.

However, just like Safaricom, it could be structured favourably for government given that IBM has been trying to get into the business of smart management of urban systems in Kenya such as traffic lights and cameras, transport systems and so on.

With the Police network using thousands of cameras to collect data, and the news that even malls such as TRM, Junction and others will be able to connect to the network to feed images into the system, IBM will have an unprecedented access to a wealth of data that can be interpreted in many different ways and yield untold commercial value.

The entry of IBM will allay fears over whether the Sh15billion (US$163million) government investment will be put to good use given that some services such as CID have been given sophisticated equipment they hardly make use of.

With the IT giant running back office systems, the level of intelligence analysis will greatly improve.

IBM East Africa head Nick Nesbitt was scheduled to meet with the Internal Security bosses this week to discuss further.

IBM is increasingly getting business in the country...it manages MPESA service, and has contracts with banks, telcos and others.

S


Wednesday, January 14, 2015

SAFARICOM WON'T RECRUIT HEAD OF COMMS, OPTS TO BRING IN OGILVY

Listed Telco, Safaricom may have opted not to hire a Head of Communications to replace Elizabeth Yoga
who left the position last year for other ventures and chosen instead to restructure its internal PR team and beef up its external consultancy team support.

Nick Wachira, the Ogilvy Kenya MD on instructions from Safaricom has dedicated a team of seven of his consultants to work on the account with some based at  Safaricom House to support Safaricom in house.

The company has embraced an expanded PR and Strategic Communications role as it grows in size and faces a multitude of brand management issues from financial earnings to regulatory matters on financial services, broadband to Safaricom sponsored events like Rugby Sevens and so on.

Yoga was the second holder of the Head of Department post reporting to Director of Corporate Affairs, Nzioka Waita.

Victoria Kaigai, now at GE was the first holder of the position which was created after the restructuring of the company under the Safaricom 2.0 strategy.

Nzioka oversees both the legal and the communications departments each of which had a HOD.

The internal Comms department at the giant telco has seen several changes in the last one year and continues to evolve as new personnel are brought in.

Former senior PR manager Anne Nderi left for Barclays while the senior manager, Digital, Maryanne Michuki left for Philips East Africa both to similar positions.

The company is expected to hire a second senior manager after luring Kui Kinyanjui from IBM East Africa last October.

Daily Nation business editor Wachira Kang'aru had been expected to return to the 5th floor premises where he once worked but is reported to have opted to stay put at the Twin Towers.

Wachira and his former Editor Washington Akumu both worked at Safaricom before they left for other ventures.

At the time, Cedric Lumiti then with Gina Din also operated from Safaricom House as in house PR consultant.

This is a big year for Safaricom on many fronts.

It is rolling out an LTE/4G service which is expected to culminate in its offering of streaming TV services in homes among other services.

It is locked in battle with Equity Bank over a plan to deploy thin SIM overlay technology asthe grassroots lender seeks to muscle in on its MPESA turf.

It needs to migrate its MPESA platform from Rackspace servers in Germany to locally based servers.

It has to roll out a brand new LTE network for the police security network in Mombasa and Nairobi with money from its own free cash flow.

And still it has to maintain market leadership in a fast evolving market.








Tuesday, January 13, 2015

IS KTN LOOKING TO DITCH CITIZEN, NTV? REPORTS

KTN is reportedly looking to quit the triad of media owners who have delayed digital migration with litigation in court over the last year or so which has included Royal Media Group, Nation Media Group and the Standard Group.

The group under an alliance known as Africa Digital Network plans to roll out a signal distribution network of its own and introduce its own set top boxes.

A story carried out in the Daily Nation today said 150,000 such boxes with free to view channels will be sold in the country in the next three weeks.

It is not quite clear what the offering on those boxes will be but the DN story said they will retail at Sh2,500 one time fee.

But since the beginning of the year, there has been talk that KTN (Standard Group) was looking to quit the group and either join KISS TV on Bamba TV tier 2 network or allow itself to continue to be accessible from the platforms already available in the country, Signet (GOTV) and PANG (Startimes) as well as Bamba and other free to air STBs.

No one is confirming but the reports indicate that the capital outlay plus the uncertain future for the ADN grouping may have caused KTN to develop cold feet.

Besides rolling out a digital signal distribution network, the consortium also has to source content and market itself vigorously in face of determined rivals who have sunk billions into the digital migration effort.

We will watch closely.

Thursday, January 8, 2015

HOW M-KOPA SOLAR BECAME 2ND BUSIEST MPESA PAYBILL MOVER

With 12,000 MPESA paybill transactions daily, Mkopa Solar is second only to KPLC in daily transaction volumes, founder Jesse Moore says.

The company that sells solar units to off-grid customers for use in lighting their homes and charging their phones on instalments of Sh40 a day for 360 days currently has over 130,000 customers in Kenya, Uganda and Tanzania.

It has been hailed as one example of revolutionary asset-financing for the poor using manageable MPESA payments.

The firm's premise was simple.

Many poor Kenyans spend money daily on charcoal, firewood, candles or kerosene for lighting especially in the rural areas.

With such households spending about 44 US cents to buy half a litre of Kerosene daily, another 22 cents on charging their phones at a nearby town and the routine purchase of dry cell batteries for flash lights, the total spend in the region is about US3billion a year.

"10 billion Kenya shillings is spent in Kenya on what I would call poor energy substitutes. The biggest one of those is kerosene but you could also talk about phone charging services, batteries, candles, all those together, it’s more than a $1.3bn market or Sh100bn," Mkopa Solar MD Jesse Moore says.

"This is Kenya only and now we are operating in Uganda and Tanzania, those markets are almost the same size. So in the 3 big East Africa markets you are looking at a $3bn market."

They developed the solar proposition where customers pay by the day which comes to Sh40 a day using  MPesa  in Kenya and in Tanzania as well while in Uganda they use both MTN money and Airtel money.

The solar unit is able to carry a lighting bulb, charge a phone and comes with a transistor radio eliminating the need for batteries.

The unit is connected to a prepaid unit which keeps track of the payments and switches the system on or off, based on whether the payments are up to date.

After a year the unit is fully paid and the customer has ownership.

The engineering designs for the units are done by locally based and UK engineers while the units are manufactured by a factory in China.

The units are on their third version now with each getting progressively more powerful.

Mkopa Solar has 130,000 customers and is one of the top MPesa Paybill transactors.

Kenya Power is the leader in Paybill volumes in the country.

Also among the top are utilities like Nairobi Water and Sewerage Services and pay TV providers like DStv, GOTV and Startimes.






Wednesday, January 7, 2015

MSHWARI DILEMMA IN NIC BANK/CBA BANK MERGER TALKS

High level talks regarding a merger between NIC Bank Group and Commercial Bank of Africa (CBA) reportedly are taking place but MShwari may be spun out of any resulting entity.

The Ndegwa family backed National Industrial Credit (NIC Bank Group) is the largest asset-financier in the country while the Kenyatta family linked CBA Group is a corporate/high net worth individuals focused bank which has had tremendous success as both the banker for Safaricom's MPESA and the proprietor of the MShwari mobile savings and loan facility.

This is roughly the third time talks are taking place between these two entities and analysts will struggle to figure out where the synergies lie.

The arranger of the deal is a UK firm.

Both are mid-tier banks with quite a focus on corporate and high end clients. CBA which is a successor to Bank of America (Bofa) when it operated in Kenya years back has been mainly for high end clients until its foray into m-banking with MShwari which has made it the second largest retail accounts holder in the country after Equity Bank.

Heightened activity in the oil and gas market has seen banks seek to position themselves to be able to carry out project finance deals in the sector.


Tuesday, January 6, 2015

THE REAL REASON MEDIA OWNERS OPPOSE MIGRATION

Royal Media boss SK Macharia whose Citizen TV dominates Kenya's airwaves
In any other country what is happening with digital migration in this country would have seen criminal charges brought up against the three media houses; Royal Media, NTV and KTN for their continued abuse of their market power to frustrate digital migration in this country.

Instead what we are seeing is an endorsement of their cartel like behaviour both by the regulators and the courts.

Sobering numbers: According to an article in The East African, a sister publication to NTV, the three media houses under a consortium they are calling Africa Digital Network, control 90 per cent of the media in the country consisting of "87 per cent market share in TV, 80 per cent in radio and 98 per cent in print."

The article suggests the media houses are loathe to give up any of this dominance and the advertising billions they command and have instead sought protracted court battles to buy themselves time to put in place infrastructure and buy equipment to digitally migrate.

This alone should have the regulators jumping into the fray.

The Kenya Communications Amendment Act for example bars anti-competitive practices amongst licensees of the Communications Authority particularly Section 84 (S) which has such warnings as 

(a) any abuse by an licensee, either
independently or with others, of a
dominant position which unfairly •
excludes or limits competition between
such operator and any other party;
(b) entering any agreement or engaging in
any concerted practice with any other
party, which unfairly prevents, restricts or
distorts competition or which;
(i) directly or indirectly fix purchase or
selling prices or any other trading
conditions; limit or control production,
markets, technical development or
investment;

By this snapshot alone, the CAK cannot claim to be doing its job of ensuring fair competitition when a dominant position by a cartel of 3 controlling 90 per cent of the market not only continually frustrates the technical development or investment in digital migration but also unfairly abuses its position to exclude or limit competition.

The marketplace is not the preserve of an exclusive cartel, it is a place where players should enter and leave according to market dynamics.

The law cannot be used to protect the dominant position of three players to the exclusion of hundreds of new investors, this is precisely why fair competition laws exist.

Even the consortium going by the name ADN should be quickly outlawed by the Competition Authority of Kenya.

Where else in the world would the three dominant players in an industry be handed a government license to entrench that position?

In the US, such an arrangement in the oil and steel industries saw the enactment of legislation that broke up Rockefeller's Standard Oil, the grandparent of today's ExxonMobil.

Likewise AT&T was split up into the 7 baby bells (regional telephone companies) such as Pacific Bell, Bell Atlantic, Bell South etc with Ma Bell being left to do long distance calls only.

The Competition Authority and the Communications Authority should bar this consortium from conducting business as presently constituted or face legal action for dereliction of duty by not only encouraging but also fostering monopolistic cartels in the country.

At the outset, when media owners had the opportunity to put together a consortium to bid for one of the signal distribution licenses, they deliberately did a shoddy job so as not to succeed and have the process restarted when each could put in their bid.

When other entities were licensed, they realized their mistake and hence the beginning of all this litigation.

Now that they lost, they have been in court demanding to be granted a license to distribute digital signals as if that is an exclusive preserve of theirs.

It is not the responsibility of government to help market cartels to adapt to a change in operating environment, they have been in business precisely to be able to foresee and prepare themselves for the digital transmission era.

They cannot now expect to bring their 90 per cent monopolistic market in a basket and ask government to make sure it is safeguarded against newer and nimbler competition in the new era.

At the same time it should be inexcusable for them to continue forcing losses on other investors who have been compliant with the changes in regime from the very beginning.

From Multichoice to KBC, independent set top box vendors, producers and installers, too many people have invested money but keep getting their plans disrupted by a cartel that has just refused to recognize the new reality.

And now that June 2015 is the deadline to migrate, this same cartel seems hell bent on dragging us until the final date as they use these delaying tactics to set up their infrastructure.




Monday, January 5, 2015

IT SCANDAL HITS CIC INSURANCE - CEO TO RETIRE

CIC Insurance may have lost up to Sh150million from corrupt practices by managers particularly the IT department. An audit carried out on various IT equipment purchases revealed a kickback scheme in which the Group IT head, a Mr. Kitur and others received kickbacks on inflated supply contracts costing the firm millions of shillings.

Eight senior managers and three other "sacrificial" lambs have been shown the door in the scandal.

The Board has also signaled to Group CEO Nelson Kuria that it is time to retire paving the way for deputy CEO Tom Gitogo to take over by next month.

CIC is the third largest insurance company in Kenya by premiums commanding a 9% market share just behind leaders Jubilee (11.9%) and Britam (11.2%).

ICEA Lion and UAP Group make up the top five.

Further audit in other projects is likely to see these losses rise to Sh300million insiders with information say.

Particularly blatant was the kickbacks that companies associated with some of the IT managers where the same day a transfer of funds to a supplier was made, another transfer would be made from that supplier's account to accounts associated with CIC managers.

IT equipment was grossly inflated in prices the forensic audit revealed. Real Time Gross Transfers 
of amounts such as Sh4million would be made to an account one of the managers had opened with his brother.

Three individuals bore most of the criminal responsibility while the others were either tangentially involved or should have stopped the corrupt practices.

More projects are to be audited at the firm which is listed on the Nairobi Securities Exchange.