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Consumers will be losers if telcos competition laws aren't enacted

By Christine Oiruria | Dec 12th 2021 | 2 min read
By Christine Oiruria | December 12th 2021

There is need to open the market to allow new and existing firms to dream of competing with Safaricom. [Courtesy]

I find the declaration by Information, Communication and Technology (ICT) Cabinet Secretary Joe Mucheru on Safaricom’s dominance inconsiderate to mobile telephony customers.

We have a public report whose recommendations were partly informed by the mobile telecommunication customers across the country.

While the Mucheru feels the market is ‘stratified, and most operators are dominant in their respective areas,’ consumers feel the pain as they receive poor quality services due to lack of network infrastructure, sharing or costly mobile money services.

While I appreciate that quality in today’s business environment is recognised as output of competition, the CS needs to recognise that if operators abuse their dominance, it would do more harm to consumers.

It was with good intentions when CS Fred Matiang’i in July 2015 announced that State would introduce new regulations aimed at guarding against monopolies.

Unfortunately, the then Attorney General Githu Muigai instructed Matiang’i to withdraw the proposals and instead subject monopolies to discussions, which are now being dismissed.

While several unfair practices have been cited in the telecommunication sector among various players, M-Pesa is the most notable one, considering it accounts for six per cent of Kenya’s gross domestic product (GDP).

This gives Safaricom a choke-hold on a large section of the economy.

The GDP value of Kenya represents 0.09 per cent of the world economy.

But within Kenya, six per cent of the GDP is contributed by Safaricom.

According to Communications Authority, as at June 2021, Safaricom had 41.3 million subscribers, compared to Airtel’s 17.3 million and Telkom Kenya’s four million subscribers.

M-Pesa still controls 99 per cent of the market share, with over Sh1 trillion in deposits as at June 2021 compared to just Sh1.9 billion on Airtel Money, their closest competitor.

As a precautionary measure, experts hold that governments must often regulate monopolies to protect the interests of consumers.

This has been done in other economies including taming John D Rockefeller’s Standard Oil Company. While monopolies aren’t bad, I still trust that there needs to be fresh conversation on dominance.

We cannot afford to let one player dictate the rules of the game. Consumers want to maximise the expected benefits and minimise costs or choose the ones that offer the biggest net benefit or the lowest cost.

There is need to open the market to allow new and existing firms to dream of competing with Safaricom.

This will deliver on quality of service to consumers, more revenue and growth.

-Christine Oiruria Communication Consultant C4E, Adjunct Lecturer Moi University.

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