Safaricom defends its dominant market share

Peter Ndegwa Chief Executive Officer (CEO) Safaricom PLC. [Wilberforce Okwiri, Standard]

Safaricom has defended its market position stating that its market share is a result of sustained mega investments over the years.

In submissions presented to Senate’s Committee on Information, Communication and Technology (ICT) by Safaricom chief executive Peter Ndegwa and Chief Corporate Affairs Officer Stephen Chege, the telco disputed assertions by the Competition Authority of Kenya (CAK) that it had abused its position in the market to the detriment of other players.

“Safaricom has not undertaken any activity that has lessened or in any way affected the ability of our competitors to compete,” said Ndegwa.

“As has been shown by the market share statistics published by the Communication Authority, Safaricom’s market share has been steadily decreasing year on year to the current levels which shows that competition is gaining and growing.”

The most profitable regional firm was giving its submissions in response to calls by Airtel Kenya to have the firm declared a dominant player and be subject to a tougher regulatory regime compared to other players.

Airtel Kenya last week told the Committee that industry regulators should introduce a sliding mobile termination rate, redistribute spectrum and enforce mobile money agent interoperability to level the playing field for smaller operators.

Safaricom, in defence, said it has invested Sh34 billion annually to maintain and expand its 2G, 3G and 4G coverage across the country to serve its 41.3 million subscribers.

“Some of our competitors have shied away from the responsibility of building and running their own infrastructure,” stated Ndegwa.

“They do not own any base stations, they do not invest in fibre connectivity, they do not invest in call centres.” According to Ndegwa, Safaricom does not have significant market power since the market remains dynamic and any operator can replicate its business model if they match its level of investment and customer strategy.

Ndegwa said it would unfair to impose any interventions that give competitors undue advantage that would distort the market and reduce investments. “Instead of seeking these interventions, we believe the competition should invest, innovate and compete against Safaricom by giving customers choice instead of seeking to tie Safaricom’s hands,” he said.

Chege cautioned against unpredictable regulation, where smaller players are unable to invest in network expansion.

The Senate Committee on ICT chaired by Baringo Senator Gideon Moi continues to receive submissions from industry players and regulators after which a report will be tabled in Senate.