December 18th 2017

Top Stories / National

Airtel Kenya under regulator investigation for customer losses

“The directors are obligated to do everything within our power as a regulator to ensure Airtel Kenya subscribers get efficient and properly-billed services,” said the source.

By Free Press Reporternewsdesk@kenyafreepress.comFriday, 10 Feb 2017 08:06 EAT

New Airtel Kenya CEO Prasanta Das Sarma who took over the company on February 1.

The Communications Authority of Kenya, the telecommunications sector regulator, has launched investigations into rampant cases of customer losses by Airtel Kenya subscribers, and may widen the scope of its investigations to include an audit into the company’s operational standards unless it gets assurance that Airtel Kenya is addressing the complaints lodged with the authority.

Senior Airtel Kenya officials including officers from the firm’s regulatory affairs department were summoned to the CA this week amid increased customer complaints to the Authority over losses arising from irregular billing and staff fraud. The firm has had a long running problem with billing of post-paid accounts, and sources at the CA informed this website that complaints from Airtel Kenya subscribers constitute a “disproportionate share” of the cases reported to the Authority.

Among the affected subscribers are reputed local businessmen and professionals as well as foreigners working in Nairobi. Some of the cases under CA review are also subject to court cases. Thousands of subscribers have cancelled post-paid contracts from Airtel Kenya in recent years, most due to suspicions that the company was inflating their monthly bills. Some, however, left to take advantage of affordable pre-pay plans including ‘Unliminet’ which, depending on usage, could cut calling, messaging and data costs by up to 50 percent.

CA is currently reviewing the company’s Consumer Complaint Handling Procedure, and a source at the authority informed this website that senior managers were considering wide-ranging investigation to cover technical operations and fraud detection. “The directors are obligated to do everything within our power as a regulator to ensure Airtel Kenya subscribers get efficient and properly-billed services,” said the source.

Some of the cases under investigation arose more than two years ago, but the source intimated to us that CAK is “deeply concerned” about emergent fraud involving staff at the company amid reports that Bharti, the Indian multinational that owns the Airtel brand in Kenya and 14 other African countries, is planning to sell its Africa operations.

The genesis of the problem, according to our investigations, is a controversial billing platform that was installed immediately Bharti took over Airtel from Zain. The platform is based in India and no Kenyan staffer knows how it operates, according to our sources, and several senior managers have called for its replacement, causing friction with their Indian superiors who sanctioned the platform.

According to confidential information, the platform’s problems may be systemic, and a former manager who has since left the company claimed that it could have been designed to multiply the cost on some post-paid customer accounts. Most of the complaints occurred when customers travelled out of the country on roaming charges.

One subscriber travelled abroad where he didn’t use the phone much, only to come back and meet a bill of nearly a million shillings. When he sought clarification about the problem, he was informed that the charges were for data services. As it happened, the phone was a simple one that did not support the alleged data usage.

Several customers who complained over similar bills succeeded in having the bills reversed through the award of credit notes in which the company allowed them to use the lines for several months to recover the irregular billings, but others did not get any help from the company, hence the legal suits and appeals for CAK intervention.

The platform, according to our investigations, is ‘the elephant in the room’ at Airtel Kenya, its use opposed by senior managers including former chief executive officer Adil Youssefi. However, none of the managers has been informed about its operation and why the company keeps it despite the persistent complaints by customers over its problems.

In the final months of his contract, the platform is reported to have caused Mr Youssefi "immense problems" at the firm but he couldn’t do anything about it since his Indian bosses sanctioned and support its use. The company has outsourced technical operations to India.

This website has run three articles on Airtel Kenya over the past month. The first article was triggered by a restructuring at the company that saw the firm retrench dozens of staff members and it highlighted the resentment against Indian workers. A second article exposed rising cases of fraud involving the company’s employees in which customers and the firm itself lost millions of shillings. The third was an exclusive report on the retirement of Mr Youssefi.

Variants of the first and third articles were published by other newspapers as well. For our investigative coverage, this website emailed questions to Airtel to receive the company's feedback into allegations that, a) it's outsourcing of key operations to Indian firms was affecting its service quality and growth, b) that the company had lost millions of shillings through employee fraud, and, c) that the company has an irregular billing system that has affected thousands of post-paid customers.

The company did not respond to any of the emails. However, after the first article, its former corporate affairs director Dick Omondi called our offices to inform us that he was still working for Airtel and would like to give us important perspectives at a face-to-face meeting. On the appointed date, he did not turn up. We emailed the company our concerns about his calls, based on the fact that his departure from the company had been well reported. After the second article, Mr Omondi called again and urged that we stop running stories on the company. He requested another meeting, for early this week, for which he again did not turn up. 

According to information reaching this website this week, both the CA and KRA are keen to review the firm’s offshore outsourcing of important services previously managed from Kenya, amid reports that Indian giant is shopping for a buyer of its Africa operations. 

“Airtel Kenya is free to implement procedures in its best financial and global interests. But where market prices, jobs and tax are concerned, our agencies will have to have a look at why, for example, while Safaricom has been transferring its backbone systems to Kenya, Airtel is moving in the opposite direction”, said a government source.


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