CAK should make quick ruling on Safaricom-Equity conflict

As the country moves to liberalise its business environment, drawing lines between what sector-specific regulatory authorities like the Communications Authority of Kenya (CAK) can do and giving them the authority to execute their mandate is of paramount importance.

Each regulator must know its domain and must function fully within it. This is the only way to ensure fairness and create a condusive business environment where all investors feel comfortable to inject more capital and create the much needed job opportunities.

But there are times that regulatory authorities have dragged or delayed their decisions to the detriment of investors.

A case in point is the present conflict about licensing of Equity Bank to provide mobile money transfer services, which Safaricom has opposed.

The mobile company says the ThinSim cards Equity Bank intends to use for the service will compromise mobile data security.

Safaricom referred the case to CAK, but despite promises to resolve the case, the regulator has been unable to make a decision.

The regulator’s Director General Francis Wangusi has not kept his promise to give a verdict on the case.

The Mobile Virtual Network Operator (MVNO) licence granted to Equity Bank, Tangaza Pesa and Zioncell allows them to issue customers with branded SIM cards and provide services similar to those offered by Mobile Service Operators like M-pesa and, Airtel Money.

During the rollout of its services, Equity Bank explained it was simply adding a new delivery channel to its offerings, and using excess capacity from Airtel to deliver these services.

Currently, it costs Sh33 to send 1,000 shillings over the most popular money transfer in Kenya, M-pesa and the receiver pays Sh27 to withdraw, making a total of 60 shillings.

Equity has argued that within the MVNO structure, sending and receiving a similar amount of money will cost one per cent of the value, meaning one will part with just Sh10.

M-pesa is great, revolutionary and has changed the way we do business in Kenya and to some extent, world over.

But there is need to change with the times and make it better and there is no better way of doing this than offering alternatives.

The expected competition will spur innovation and possibly, price cuts that ultimately accrue to the consumers.

But being a major player in our country’s economy, Safaricom too should be respected. This is the reason CAK must take the views of both companies into consideration and make a quick decision on the use of ThinSim.

This will be beneficial to consumers. It is a decision that anyone who champions consumer protection should support.

This will be in consonance with the general principle applied within our borders and other jurisdictions of expert body regulation and adjudication that a forum or institution created for a purpose as opposed to a general purpose should decide such disputes.

Consumers are looking for variety in order to make the choices they deem good for their lifestyles.

It would help if companies that operate within Kenya’s borders and consumer agencies align themselves to people’s expectations and CAK should guarantee Kenyans this privilege.

Properly crafted rules and products covering financial services will protect consumers and the honest, responsible businesses that sell them.

Only the dishonest in industry and government- need to worry.