Economists call for independent study on dominance

The Institute of Economic Affairs (IEA) has called on the government to conduct a comprehensive study on the telecommunications sector to determine market share controls and identify companies that are abusing their dominant position.

The IEA chief executive Kwame Owino said Thursday the study should be funded by the government to ensure that the final output is not influenced by interested parties and also win telcos’ confidence.

Mr Owino said that although some of the regulations proposed by the Communications Authority of Kenya (CA) are reasonable, public consultation may not have been adequately addressed, sparking disagreements among operators and regulatory authorities.

“To get market confidence the government needs to conduct a study funded by itself,” Mr Owino said Thursday during a public meeting organised by the institute to discuss market dominance laws and regulations in the country.

Dennis Kabaara, an independent analyst, said during the forum held in Nairobi that regulations on dominance are not unique to Kenya’s telecommunications sector, the same having been implemented in Nigeria and the DRC where MTN and Airtel were declared dominant respectively.

Level the playing field

He, however, said the issue should not be about targeting companies but ensuring that the regulations offer consumers better services and level the playing field.

“What we should be focusing on is looking at dominance and how it affects access to the market or how it affects market development,” said Mr Kabaara.

“You should not chase after a company because you won’t get it,” he said.

The call comes at a time when 10 sector regulations are being revised by CA and the Ministry of Information and Communication, key among them Fair Competition and Equality of Treatment clause. In the revised regulations the clause empowers the CA to declare any telco with a market share of over 50 per cent dominant.

READ: CA seeks powers to reduce Safaricom’s market share

This clause has split operators and the two regulators — CA and the Competition Authority of Kenya (CAK).

Safaricom and CAK are opposed to the CA’s recommendations to automatically declare any firm that has more than 50 per cent market share dominant while Airtel, on the other hand, supports the sector regulator saying it will level the playing field.

Previously, regulations in the telecommunications sector fixed the threshold for dominance at 25 per cent of the gross turnover of the entire telecoms market.

The Kenya Information and Communication (Amendment) Bill 2013 pushed the threshold for dominance to 50 per cent of the relevant gross market, putting it at par with the CA’s threshold.