We’ll not hang up in competition fight, Safaricom tells its rivals

From left: Safaricom Chief Executive Bob Collymore, Chairman Nicholas Ng’ang’a and Chief Finance Officer Sateesh Kamath share a light moment at the telco's annual general meeting at the Bomas of Kenya in Nairobi yesterday. [Wilberforce Okwiri, Standard]
Safaricom yesterday expressed confidence it would win the ongoing debate on dominance in the telecommunications sector.

This even as legislators are set to table a report on policy interventions that could recommend sanctions against the mobile service provider.

The firm told shareholders at its annual general meeting it is successfully turning around the perception that its dominance is harmful for the telecommunications sector.

The telco’s management conceded that it is dominant in several market segments.

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Safaricom has been uneasy following a recent probe by Parliament that has reignited debate on its dominance as well as interventions to tame it recommended by an Analysys Mason report following a study on the state of competition in the industry last year.

Safaricom chairman Nicholas Ng’ang’a said the firm would continue to push back not just on the current case where it faces the threat of special surveillance from regulators owing to its size but also other “toxic” regulations that may come up in future.

“We are gaining traction in this (dominance) argument… we will have to continue pushing back on regulations that are not in the interest of the growth of the industry, individual enterprises or consumer,” Ng’ang’a said at a briefing after the AGM.

“We will continue making the point that regulation should not be in favour of those that have not met their licence requirements… It must not be to reward those who have not done as much as we have.” National Assembly’s Committee on Information, Communication and Technology (ICT) has over the last two months met different players form the industry with a view of getting insights on regulatory and licensing gaps in the sector. The dominance report has raised temperatures in the sector, with players stating their case for or against the implementation of the recommendations by Analysys Mason.

The report proposes requirements on a dominant player to partly open up its strategies before implementation as well as scale its products such that competitors can be able to replicate.

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If implemented, it would also require players to share infrastructure in a regulated manner as opposed to the current scenario where sharing is on a commercial basis.

Safaricom CEO Bob Collymore conceded that his firm is a dominant player but noted that it had not abused its position to warrant interventions such as price controls. He added that the ex-ante interventions that would be made should the proposals in the Analysys Mason report be implemented would not benefit consumers but instead benefit the shareholders of Safaricom’s competitors, who according to him, are not known.

“It’s no secret that the competition has been quite vocal in its push for parliamentary and regulatory intervention to have Safaricom shackled in our ability to deliver innovative and competitive solutions for our customers,” he said.

“If we go by the definition of a dominant operator being one with over 50 per cent market share, then we are in fact dominant in a number of market segments and this should be clearly positioned. But I would like to make it clear that we are not opposed to a declaration of dominance.”

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SafaricomBob CollymoreTelecommunication Company