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'Kenya's govt should not regulate telco competition'

Kenya , 06 Nov 2015

'Kenya's govt should not regulate telco competition'

Safaricom has urged the government to refrain from trying to regulate competition within the teleco industry.

The telecommunications services provider confirmed that it has secured 67% of the mobile telephony market in Kenya, where the penetration rate stood at 84% as of June 2015.

In the past this has worried competitors including Airtel Kenya who have called on the Competition Authority of Kenya to act on Safaricom's perceived dominance in the market.

Safaricom has said it is not afraid of competition but the government should let the market forces determine how the industry is shaped. "On the regulatory front, there remained challenges particularly important to us, is the whole question of competition," Nicholas Nganga, Safaricom chairman said at the release of the half year results for the company this week.

"We don't fear competition, we would like to have strong meaningful competition that keeps us alert and makes us more innovative," he added. "But competition must be within best known practice internationally. Personally I do not believe that any authority or government can manage competition."

Nganga said that the government can only lay the regulations on how the companies can operate in regards to competition.

The Communication Authority is in the process of creating a body of consultants to look at the broadcast and telecommunication industries, to indicate level of market dominance by companies and anti-competitive behaviours.

In an interview with Nation Media in September 2015, the chief executive of Airtel Kenya, Adil El Youssefi said that the company would exit the country if Safaricom's dominance is not reduced.

El Youssefi said, "We have been trying for over five years and have not made one dollar in profit. Airtel is likely to exit Kenya if the market structure is not addressed in terms of dominance."

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