Kenyan court challenge to Equity Bank MVNO thrown out

A legal suit brought by the Consumers Federation of Kenya (COFEK) against the mobile virtual network operator (MVNO) licence awarded to Equity Bank in 2014 has been dismissed.

Equity Bank was granted the licence by the Communication Authority of Kenya (CA) in 2014, alongside two other companies, but COFEK took legal action against the award, saying the regulator had not followed the correct procedure in issuing the licences.

“There has been no practical assurance of safeguarding consumers from bad services associated with mobile money service providers. The agreements have no assurance that they will not turn out to be pyramid schemes as witnessed in the past,” the group had said.

However, the case has now been dismissed after Lady Justice Mumbi Ngugi ruled there was no evidence the granting of the licences was conducted in an irregular manner, and did not violate consumers' rights.

“The licences issued to the respondent was subject to contractual obligations, which did not require any public participation. I therefore did not find any violation of consumers' rights to warrant cancelling the licence,” the ruling said.

COFEK had been seeking orders to cancel the MVNO licence, accusing the CA of issuing the licences in an “opaque manner”. Consumers, the group said, were concerned about the indication of Equity Bank and the other licensees that they would provide mobile money transfers when they had not sought the necessary approval from the Central Bank of Kenya (CBK).

“There has been no practical assurance of safeguarding consumers from bad services associated with mobile money service providers. The agreements have no assurance that they will not turn out to be pyramid schemes as witnessed in the past,” the lobby’s lawyer had said.

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