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Safaricom opposes proposals on price control

Kenya , 09 May 2018

Safaricom opposes proposals on price control

Safaricom has strongly opposed price control proposed by the Communication Authority (CA), stating that it would hurt the company.

A Competition Study, conducted by Analysys Mason on behalf of the CA, suggests that call tariff prices could be capped while giving other players a way to compete with perceived dominant players.

The study also suggested the regulation of infrastructure sharing in the country, an issue Safaricom believes should be negotiated in commercial terms as it is currently.

"We are generally concerned about some of the recommendations that imply that you can hold back a leading investor and performer to allow others to catch up. Or you can neutralise the investments which have been made with great focus and good strategy and try and promote someone who hasn't taken the same investment risk," said Nicholas Ng'anga, Chairman of Safaricom board. "We do not agree with this."

"We feel quite strongly about this but we are in consultation with the regulator. We would like to fully be in compliant with all the recommendations that eventually come forth, but we want to - before they are made into law - make our position known," he said.

Sateesh Kamath, the Chief Financial Officer at Safaricom added, "Principles in this country have always aligned to free market economy where people who take risks and invests will reap in the long term. When it comes to retail price recommendations, we believe it is anti-consumer because it reduces the amount of services we can offer the consumer."

The executives were speaking at the company's full financial year results for 2017/2018, where M-Pesa and Mobile Data posted strong returns.

Both categories contributed 73% of the total revenue for the financial year, with M-Pesa posting KSHS 62.9 billion of total revenue and mobile data KSHS 36.4 billion.

The company posted a profit of KSHS 55.29 billion during the financial year.

Safaricom's fibre footprint clocked 5,000km, passed 141,000 homes and connected 1,800 commercial buildings. It has increased its 4G sites to 1,600 countrywide with more investments on the way.

The company also offered a sneak preview of its new app Bonga, representing a mix of social and money transfer offering.

"This is a product under development and it is a platform designed to leverage capabilities provided by modern technology such as smartphones to provide a faster convenient and smooth experience while making payments," Kamath said.

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