Companies

Airtel digs in amid M-Pesa charges row with Safaricom

m-pesa

An M-Pesa agent attends to a client in Nairobi. Safaricom has allowed rivals to engage its agents for mobile money transfer services. Photo/FILE

Airtel Kenya has said it will not withdraw a pending case contesting Safaricom’s pricing of its mobile cash transfer services, despite a recent concession by the company allowing M-Pesa agents to also work for rival firms.

Airtel says the case filed with the Competition Authority of Kenya (CAK) “will go to its full length,” arguing that it wants the regulator to make a ruling on the matter.

Safaricom classifies rival network subscribers such as those of Airtel as “unregistered” users of the M-Pesa service, charging them up to double the cost incurred by its own customers.

“The case will continue because at the moment there is a very huge price difference on what Safaricom charges its subscribers for sending money to rivals, this and the large network effect makes it impossible for consumers to send money outside the network,” Airtel Kenya managing director Adil El Youssefi told the Business Daily on Thursday.

Last week, Safaricom announced that it had opened its entire M-Pesa agency network to its rivals, meaning the estimated 85,000 M-Pesa shop owners can now also sign as agents of Airtel Money and Orange Money (offered by Telkom Kenya) under the same premises.

READ: Safaricom opens up M-Pesa agents’ network to rival mobile cash firms

With Safaricom controlling more than two-fifth of the mobile money transfer business, other operators have claimed that barriers such as exclusive agent deals and different pricing are an abuse of its dominant position.

The telco giant has, however, countered that it has achieved its dominance through huge investment, which the rivals also need to make.

Airtel Thursday claimed even though it welcomes Safaricom’s announcement opening up its agency network, M-Pesa agents are still hesitant to start housing rival operators.

“All our M-Pesa agents are, therefore, free to engage with whomever they please (this will include other mobile money service providers),” said Safaricom corporate affairs director Nzioka Waita in a recent interview.

Besides the sharing of mobile phone cash transfer agents, Airtel has also been pushing for inter-operability of the M-Pesa network.

Airtel also wants the Central Bank of Kenya to come up with a ceiling tariff on what the operators can charge for sending money across networks.

In the case filed with the CAK, Airtel wants Safaricom’s pricing of its M-Pesa services investigated, arguing that they are anti-competition.

READ: Airtel case over M-Pesa under review by competition board

In the petition with the watchdog Airtel accuses its rival of setting the cost of M-Pesa mobile cash transfers to Airtel Money customers at double the price charged on Safaricom-to-Safaricom customers.

“We salute the gesture by Safaricom to open up its mobile money transfer agent network and we hope this will be followed by act, our investigations on the ground shows  that not all M-Pesa agents are aware of the directive and as such are not willing to host the other operators in fear of their licences being revoked”  said Mr El Youssefi.

M-Pesa’s popularity, which has won it 18.1 million customers since its launch in 2007, has largely been attributed to Safaricom’s vast network of agents across the country that makes it easy for subscribers to deposit and withdraw cash.

Airtel, Orange and yuMobile, on the other hand, have a relatively smaller number of agents, making it difficult for their customers to make similar transactions using their phones.

CAK, which was arbitrating the matter out of court, had indicated that it would make a ruling on the dispute by end of last month but now says the verdict had been delayed awaiting board review.

The telco operators are expected to register the settlement at the High Court, after which it becomes legally binding. The court had given the parties up to September 19 to enter the settlement.