Inside Politics

Kepsa mulls new study in Safaricom dominance row

Thursday, October 28th, 2021 00:00 |

Private sector lobby Kenya Private Sector Alliance (Kepsa) yesterday steered clear of the ever-lingering dispute between mobile operator Safaricom and rival operators over abuse of market dominance.

During a submission to the Senate Standing Committee on ICT yesterday, Kepsa called for another study on the contentious issues, five years since a similar study was undertaken but was never implemented.

“There have been shifts in the telecommunications market in the past few years and the landscape continues to change.

Since the last study the landscape has changed and we now even have tower management companies,” argued Kepsa on the subtle issue which threatens to put Safaricom on the spot, once again.

Kepsa officials were appearing before the committee to offer a private sector view on market dominance by telecommunications operators, legislative and policy issues follows claims that the market leader had a competitive advantage over its rivals.

Interventions needed

“A baseline of data needs to be established as well as the impact of the market shares, before looking at intervention measures to alter the market balance,” it recommended.

The last competition study was undertaken in 2016 and recommended a more comprehensive study to be undertaken by the regulator Communications Authority of Kenya (CA), which had been tasked to provide insights into who was dominant in the various sub-sectors.

Other areas of concern include interoperability as well as mobile voice, data and mobile money services with key issue being calls to split Safaricom’s Mpesa as a standalone business entity.

Delayed implementation

Delayed implementation of the 2016 Telcoms Report on Dominance – whose absence is threatening to level the playing field for small operators -- has, for instance, been said to have caused headwinds during plans like pioneering mobile money interoperability tests between Telkom and Safaricom cash transfer services, T-kash and M-pesa.

Interoperability was expected to solve difficulties associated with mobile money transactions, where consumers have previously complained of costly and highly tedious processes of sending money across networks with the procedure often tilted in Safaricom’s favour owing to huge transactions tariffs set by the operator.

The small players have long maintained that Competition Authority of Kenya (CAK) and CA should split up Safaricom and M-Pesa into separate stand-alone business units in order to compete favorably and open the market.

Ploughing back revenues

Rather than pocketing the proceeds from its innovation, Safaricom has argued that, it has ploughed back revenues to transform itself into the multi-billion firm it is today.

It is an entitlement Kepsa braced in its submission to the Senator Petronilla Were –led Committee.

The lobby finally recommended that a National Critical Infrastructure Policy be set up to enhance coordination and cooperation among industry players including competitors.

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