Kenya's Communications Authority (CA) says it will consider the findings of a study it commissioned on the competitiveness of the country's telecommunications sector before implementing its recommendations that include trade restrictions on dominant market player Safaricom.
Christopher Kemei, Acting Director General at the CA said, "A number of rapid changes have taken place in the ICT industry since liberalisation in 2000. The Telecom Competition study we are releasing today is geared to identifying the relevant markets and submarkets within the telecom sub-sector, the number of players that exist and their respective market shares. The report also seeks to identify market barriers, if any, that prevent entry, competition and the growth of the players in the era of changing technologies. We are enthusiastic to listen to views of stakeholders in this forum, following which, the report shall be finalised taking into consideration the feedback from everyone."
Kemei says the CA is committed to institute regulatory interventions based on the study and comment on its findings by the telecoms sector in order to "...facilitate the development of ICTs and catalyse our socio-economic development goal."
Safaricom enjoying high market share
The study recommends national roaming and retail offer restrictions on Safaricom in addition to a prohibition of surcharges for mobile money transfers to unregistered users as part of remedies to make the country's telecommunications market more competitive.
Phillip Bates, Principal in the consulting division at UK firm Analysys Mason, which conducted the study on behalf of Kenya's CA, says Safaricom currently enjoys more than 70% market share of subscribers, minutes and revenue in its grip of the telecoms sector in East Africa's biggest economy.
"Safaricom also enjoys a very high market share in the mobile money market. Safaricom is dominant in the tower market as well, while each operator is dominant in its own network in the call and SMS termination on mobile networks. The principal remedies proposed on Safaricom are a national roaming and retail offer restrictions. The study proposes prohibition of individually-tailored loyalty schemes and promotions as a remedy for non-discrimination. The report proposes surcharges prohibition for cross-platform transfers. This will ensure same fees charged by operators for transfers to registered and unregistered users, including those of other platforms."
Growing concern over Safaricom's dominance in the local market reached a pivotal point last year when Jakoyo Midiwo, deputy minority leader in Kenya's national assembly, called for the telco to be to be broken up into pieces.
He voiced concerns over job loss within Kenya's banking sector and called for government legislation to separate the business of telecommunications from that of banking among other interventions.
Vodacom currently has majority control of Safaricom after it bought 34.94% shareholding in May last year for $2.6 billion.
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