SAFARICOM has been directed to pay $27 million (Sh2.36 billion) fee and improve its "poor" service before it is issued a new operating license .

Communications Commission of Kenya yesterday said Safaricom's initial license term is due to expire on June 30 next year and has given the company until then to improve its quality of service failure to which it may be denied a license.

"We are not going to allow consumers of services that we regulate get poor services when they are paying for them," said CCK director general Francis Wangusi.

He added that Safaricom has for the last three years failed to meet the minimum quality of standards threshold.

CCK surveys quality of service given by the four licensed mobile phone service operators based on eight key parameters.

The parameters include completed calls rate, call set up success rate, dropped calls, blocked calls, speech quality, handover success rate, call set up time and signal strength.

All the four mobile phone service operators are given an initial license for 15 years after which the license is supposed to either be auctioned if the holders do not apply for a renewal, or renewed for another 10 years after an assessment of the firm's operations.

If Safaricom's license is renewed come June 2014, it will operate for another 10 years after which the license will now be subjected to an auction where the most competitive bid will be issued with that license. Safaricom will also be allowed to re-tender for that license in 2024.

Safaricom was issued with a licence on July 1, 1999 and paid a fee of $55 million for it. Kencell, now Bharti Airtel was the second company to be issued with a licence the following year while Econet wireless now known as Essar Telecom got the fourth licence in 2003 and unlike the other firms, it only paid $27 million for that licence.

In the region, some countries have fined telcos heavily with others cancelling licence over poor service. In 2011, Rwanda revoked the licence of Rwandatel and fined MTN over the issue while last year, Nigeria fined four operators including Airtel Nigeria a total $7.4 million for failing to meet minimum service standards set by the industry regulator.

CCK currently imposes a fine of Sh500,000 on an operator that does not meet the stipulated quality-of-service standards set by the authority. However there are proposals to increase this to 1 per cent of annual turnover by these firms to stiffen the penalty