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Safaricom dominance claims report out in May

BUSINESS
By Frankline Sunday | March 7th 2017
ICT Cabinet Secretary Joe Mucheru. He has already opposed a proposal by a UK consulting firm to split Safaricom from its M-Pesa platform. [photo: file]

The outcome of a market dominance probe on mobile service provider Safaricom will be known as early as May.

Communications Authority of Kenya (CA) says it is reviewing a draft report of a study into competition in the local market conducted by UK research firm Analysys Mason before its release in two months.

“The Competition Study draft report is under review,” explained CA Assistant Director for Communications and External Affairs Rachel Alwala.

“This process will be completed in mid April considering we have to work hand in hand with the Competition Authority of Kenya (CAK) and the licensees then later publicly release it in May.”

CA commissioned the report on competition in the ICT sector last year following reports that Safaricom had become dominant in voice and mobile money and could be using its position to edge out competition.

Preliminary findings of the draft report seen by The Standard indicate that Safaricom was found to be dominant on both voice and mobile money, holding more than 80 per cent of the market share in both market segments. The report says Safaricom also enjoys dominance of the network infrastructure, owning the bulk of cellphone towers in marginal and low populated areas.

“For a period of five years, Safaricom should provide 2G, 3G and 4G roaming on its network to other Tier 1 mobile operators in the counties identified for regulated tower sharing,” reads the report recommendations in part.

This means that Safaricom is to develop a pricing formula based on the long-run incremental cost (LRIC) of providing national roaming services to under-served areas.

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The report further recommends that an interoperable mobile money platform be established.

The proposed platform, according to the report, would allow other mobile money service providers and consumers to plug into an interoperable system.

“Safaricom should work in good faith with the other mobile money licensees, the CA, the Competition Authority of Kenya (CAK) and the Central Bank of Kenya (CBK) to implement a system to enable automatic and near-instantaneous transfers to and from users of other mobile money platforms by December 31, 2017,” says the report.

The report findings are at odds with the Ministry Information, Communication and Technology.

The ministry has already opposed a proposal to separate Safaricom from its mobile transfer platform, M-Pesa.

Cabinet Secretary Joe Mucheru has termed the proposal by Analysys Mason detrimental to investors and innovators.

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