Airtel steps up lobbying for rules on dominance
DAILY NATION By LILIAN OCHIENG
Tuesday July 07,2015
Airtel Kenya has engaged a high gear in its lobby for the adoption and implementation of fresh market dominance rules. The plan is aimed at levelling the playing field to enable competition to thrive.
The telco’s call comes shortly after ICT Cabinet secretary Fred Matiang’i announced that the Kenya Information and Communications (Fair Competition and Equality of Treatment) Regulations, 2015 would be tabled in Parliament this week.
On Friday, Airtel Kenya CEO Adil El Youssefi hosted the Senate committee on Information, Communication and Technology chaired by Mr Mutahi Kagwe. Mr Youssefi urged the Senators to intervene so that other mobile companies are not edged out of the market.
“It is common sense that Safaricom needs to be split. Let M-Pesa be a national platform that is independent, for the mobile user to freely choose their mobile network as opposed to insisting that one has to always use a Safaricom line to access M-Pesa,” Mr Youssefi said.
Airtel seems to have enlisted the backing of the ICT ministry and the Senate.
Dr Matiang’i told Communications Authority of Kenya Director-General Francis Wangusi to treat dominance as a matter of priority as he begins his new term.
“Telecommunication firms need to be regulated to ensure some players are not strangled in the market,” said Dr Matiang’i during a media briefing to usher in Mr Wangusi, who promised to tackle regulation of dominance with urgency.
PROTEST
Safaricom has, however, protested the move telling Business Daily on Friday that their suggestions were not considered in the drafting of the regulations.
If the new laws are adopted by Parliament, Safaricom may be required to split its businesses so that M-Pesa, mobile phone services and infrastructure arms are run independently.
Discussion on dominance was first initiated by Airtel through a letter to the competition watchdog and the communication sector regulator. The telco’s push prompted the Communication Authority (CA) and Competition Authority of Kenya to come up with a Memorandum of Understanding (MoU).
REPORTED PROFITS
The MoU is meant to help strengthen the two authorities’ muscles in regulating market dominance and sorting out the differences that the two entities have over the telcom sector.
What hastened the move on dominance rules was a letter by Dr Matiang’i demanding a brief on what the watchdog was doing in preparation to declare Safaricom a dominant player. CA received the letter on December 23, 2014. It was addressed to Mr Wangusi and copied to his chairman Ben Gituku.
Airtel Kenya, the country’s second largest telco, controls about 16 per cent of the market.
Airtel Kenya now seems to have all the reasons to fight market dominance as the latest industry statistics show that Safaricom controls all segments of the market — voice (84 per cent), SMS (96.4 per cent), mobile data (70 per cent) and mobile money (66.7 per cent).
“It is not to the interest of anyone to have only one operator,” Mr Youssefi said.