Kenya’s competition watchdog clears dominant operator Safaricom
Competition Authority finds no sign that Safaricom, which has a 67% market share, has abused its dominance
Kenya’s competition watchdog expressed concern on Tuesday about the wider economic effect of the tough line on dominant operator Safaricom that legislators and the country’s telecoms regulator had taken, saying no action was needed.
SA’s Vodacom owns 35% in Safaricom with the Kenyan government and the UK’s Vodafone also holding stakes.
“Any regulation focusing on the [telecoms] sector should have a multi-agency approach, because its effects would cut across all the drivers of the economy,” said Wang’ombe Kariuki, director-general of the Competition Authority.
Kariuki said the Competition Authority had not found any evidence that Safaricom, which has a 67% market share, had abused its dominance.
“Any regulatory intervention should be aimed at supporting and increasing consumer welfare and at no time should regulatory intervention have an object of deepening private shareholders’ gains,” he added.
Safaricom has been found guilty in the past of entering restrictive agreements with its mobile (M-Pesa) money agents which prohibited the selling or promotion of services by its rivals, Kariuki said.
The company was ordered to delete all the restrictive clauses in the agreements, allowing the agents to offer mobile money services and products from other operators, he added, revealing the regulatory action for the first time.
A draft report of a study commissioned by Kenya’s telecoms regulator recommended that Safaricom should offer rivals access to its transmission sites and its vast network of mobile money outlets to increase competition in the sector.
It also said that the Communications Authority should curb Safaricom’s ability to offer promotional tariffs to its 30 million customers that its rivals were unable no match.
Safaricom CEO Bob Collymore told the committee on Monday that his company did not hinder competition.
The other big players in the market are Bharti Airtel’s Kenyan unit, which has a 19.7% market share, and Telkom Kenya, controlled by London-based Helios Investment, with 8.6% of the market.