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Safaricom fights off abuse of dominance claims

NEWS
By Frankline Sunday | February 23rd 2017
Safaricom Chief Executive Bob Collymore

Communications service provider Safaricom has said splitting the company into smaller components would kill its competitive edge.

Speaking on the sidelines of a payments innovation summit yesterday, Safaricom CEO Bob Collymore attributed the company’s success and growth to innovation and investment.

He was responding to renewed calls from National Assembly Deputy Minority Leader Jakoyo Midiwo to have the telecommunications firm split into several entities on account of its dominance in the market.

“We do not believe dominance in itself is a crime. If you have players who are not as efficient, you cannot blame the ones who are efficient,” Mr Collymore said.

He added that his company has not abused its dominant position.

“We constantly look at what we are doing to see if it’s anti-competitive. It would be irresponsible and a big risk for us to conduct our business in an anti-competitive way.”

Collymore added that breaking Safaricom apart would be counter-intuitive for the sector and could potentially expose the market to distortions from large global players.

A draft report by UK consultancy firm Analysys Mason, which analysed Safaricom’s position in the Kenyan market, indicates that the firm has an 80 per cent market share in mobile communications and mobile money markets.

Market position

The study, commissioned in May last year by the Communications Authority of Kenya (CA), recommends a system where Safaricom charges the same fees for money transfers to registered and unregistered users, as well as to users on other networks.

It further recommends that Safaricom provides national roaming services to other telecommunication service providers for its 2G, 3G and 4G infrastructure in areas where other service providers have less reach.

Collymore has, however, defended his firm’s market position, saying in-house studies attest to its fair practice.

“It is a free market. No one says you have to go and buy a Safaricom SIM card, but still, we connected 1.6 million new SIM cards to our network last year. Who forced all these people to buy these SIM cards? We do not believe that just because someone has a large market share they should be punished,” he said.

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