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At Cofek, consumer interest comes first

By STEPHEN MUTORO | June 17th 2014

Mr Kiriro wa Ngugi’s, commentary “Cofek’s fight with Equity bad for business” in The Standard of June 12, 2014 was as uncalled for as it was misleading.

It was far-fetched for him to have insinuated that Cofek is “fighting” Equity Bank over the latest case we brought against the Communications Authority of Kenya (CAK) and three Mobile Virtual Network Operators (MVNO’s) namely Finserve Africa Ltd, Zioncell Kenya Ltd and Mobile Pay Ltd.

Although Finserve Africa Ltd is a subsidiary of Equity Bank, the article remained long on assumptions but short on demonstrating two facts – that it was related to our court pleadings and how we are perceived to be fighting the bank.

The kind of exaggerations and half-truths expressed in the said article are best ignored lest they are sanitised by way of response. My colleagues have, however, persuaded me to set the record straight.

In observance of the sub judice rule, I won’t answer him. The author failed to state his known interest in the institution he appeared to speak for.

The case in court is principally on the regulatory process, perceived gaps and implications thereof.

Consumer protection is a specialty area. 

Only a consumer expert will see the value of long-term vision. Cofek does not believe in antagonising businesses. We are aware that the market and consumers have a symbiotic relationship.

Businesses and consumers are joined at the hip and are two distinct sides of the same coin. The two are connected by certain legitimate expectations.

Consumers expect value for money for the goods and services while businesses expect profit.

A regulator comes in between the two players to ensure compliance to the laid-down rules. Besides ensuring the rules of the game, CAK would ensure a win-win scenario by ensuring fair play.

CAK has claimed on its website that it has “developed detailed guidelines that will generally act as safeguards to the end users in terms of quality of service, billing and customer-care”. It then ends by saying that those “guidelines will soon be made available …” Developing guidelines without public participation and keeping them indefinitely away from the public would disadvantage consumers.

As of today, no consumer information, education and communication campaign has been conducted either by CAK or the licensed MVNO’s.

Another concern was about the role of Central Bank of Kenya on MVNO’s licensing and supervision.

When such fundamental questions are asked, they are purely matters of law and procedure.  It is difficult to see how one would be “fighting Equity” on such need-to-know issues. The Kenya Information Communications (Amendment) Act lists Cofek as one of the 8 independent institutions which form a selection panel for the board of CAK. 

If such a legally credible body wrote to CAK on May 29, 2014 seeking to have the issues clarified and to date no response has been forthcoming, were we to raid their premises so as to seek answers? We chose the lawful process. We support all aspects that would promote market competition. Impatient people who know little art and science of consumer protection would be easily deceived by so called “variety” or low pricing to mutilate competition as we know it. Sound, competition is informed by good market regulation and not price promotions. There is no guarantee that low pricing cannot change for worse with bad market regulation.

The myth that dominant players can only be beaten by other major players is erroneous. The more the numbers of strategic small players entering and being sustained in the market, the more the pain for dominant player(s).

If the interests of Safaricom inadvertently converge with or in our case - that is a mere coincidence. Excessive and unrealistic phobia for Safaricom by its peers should not derail objective consumer interest.  Should we lose or win the case, we will accept the verdict either way. 

We urge our critics to base their arguments on facts – whether or not we seem to have, without prejudice.

Mr Mutoro is the Secretary General, Consumers Federation of Kenya (Cofek)

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