Airtel renews calls for regulators to declare Safaricom dominant

Airtel Africa CEO, Christian de Faria, has hit out at Kenya’s competition and telecommunication regulators for not declaring Safaricom a dominant provider, which he says has made it difficult for the company to compete and become profitable.

Airtel is also demanding allocation of 4G frequency spectrum, arguing that Safaricom is already enjoying the first-to-market advantage having been allocated the bandwidth last year.

READ: Safaricom gets headstart in frequencies scramble

“We are calling on the Kenyan regulators (Competition Authority of Kenya (CAK) and Communications Authority of Kenya (CA) to put their acts together. We are asking for a level playing field and that some conditions be put to the dominant player so that the small ones can compete fairly,” Mr de Faria told Business Daily, after a media briefing in Nairobi where he unveiled the company’s new corporate identity.

READ: Competition body backs Safaricom in size row

Airtel Kenya CEO Adil El Youssefi said failure by the regulators to declare Safaricom dominant has made it the only profitable mobile firm in Kenya.

“Airtel has not made a shilling in profit for five years that we have been running this network despite investing millions of dollars in the market. The reason is that the market is concentrated and only one operator makes profit,” said Mr El Youssefi.

Safaricom announced a Sh31.9 billion net profit in the year to March. The number of telecommunication firms have been reduced to three from the previous four following yuMobile’s exit. Telkom Kenya’s Orange is also looking for a suitor to buy 70 per cent of its shareholding.

READ: Safaricom and Airtel to absorb 175 yuMobile staff

The two regulators last month signed a memorandum of understanding (MoU) that brought to an end a supremacy battle over who has powers to monitor the abuse of dominance in the telecommunication sector. The MoU will enable the two to define areas of specific mandate and those that need joint or converged operations.

The CAK is the regulatory agency in charge of competition matters in all sectors of the economy while the CA is the telecommunications and broadcast watchdog.

On March 10, the CA published a set of 11 regulations, including Fair Competition and Equality of Treatment Regulations, that would see any telecommunication or broadcasting firm that controls 51 per cent market share automatically declared dominant.

The regulations were meant to come in force mid this month, but the competition watchdog has refrained from declaring any such operator dominant before a number of factors are established.

CAK holds that a dominant player must have the market power to raise prices without suffering a drop in sales.