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Airtel bids for laws to help small players in telecoms

By Dominic Omondi | July 6th 2015


A day after the Communication Authority of Kenya (CA) announced it had a bill that would deal with the contentious issue of dominance in the telecommunications market, Airtel Kenya recommended that M-Pesa be hived off from the other services Safaricom offers.

M-Pesa is Kenya’s most popular mobile money transfer platform, and splitting it from the other business lines the region’s largest telecoms firm runs would create a level playing field for all the players in the country’s telecoms space, Airtel said.

Speaking at a press conference on Friday after a closed-door meeting with members of the Senate’s ICT Committee, Airtel Kenya CEO Adil Yousseffi insisted such a move was not meant to “punish success” but to “allow small players to make a profit and compete”.

Mr Yousseffi said such a decision was especially critical given M-Pesa’s significance in Kenya’s financial services sector.

“When you have such a stronghold on a national resource, that national resource needs to be spun off as an independent entity,” he said, adding that such decisions have been made in the US, Britain and even in Gabon where Bharti Africa — Airtel Kenya’s parent company — was declared dominant after surpassing the 50 per cent market share.

Create equity

On Thursday, CA, through the Ministry of Information and Communication, said it would sponsor a bill to address concerns raised by industry players who have been pushing to have Safaricom declared a dominant player.

Mutahi Kagwe, the chairman of Senate’s ICT Committee, said there was need to review the entire industry to create equity in the sector.

The senator added that, as a committee, they were more interested in understanding how all the 47 counties in Kenya would be provided with telecommunications services equally.

“It is in this light that Airtel invited us to brief us on the challenges they are experiencing,” Mr Kagwe said.

The Senate committee promised to visit all the other players to understand the competitiveness of the market.

Safaricom has in the past maintained that such a move is uncalled-for as it discourages hard work and innovation.

“Our position is that we should let market forces dictate the market,” Safaricom’s head of corporate and communications department, Marie-Anne Kui Kinyanjui, told The Standard.

Mr Kagwe noted that Kenya is in a unique situation, with one player holding about 88 per cent market share.

There are three players in the telecoms industry after yuMobile exited the market last year after consistently making losses. Airtel and Orange are yet to be profitable, while Safaricom, in its financial year to March 2015, reported Sh31.9 billion in profits.

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