Companies

Airtel case over M-Pesa under review by competition board

aitel

Airtel Money and M-Pesa shops in Nairobi. Photo/FILE

A verdict on the row between Safaricom and Airtel over the pricing of mobile cash transfer services is under review by the Competition Authority of Kenya (CAK) board before being announced publicly.

CAK director general Wang’ombe Kariuki says the settlement reached by the two telecommunication companies will be announced “in due course”.

“The report is currently with the board and we expect them to approve it by the end of this week,” said Mr Kariuki told the Business Daily in a telephone interview. “I cannot comment on its content.”

Airtel had filed a petition with the competition watchdog accusing their 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.

The telco argued that by categorising non-Safaricom customers as unregistered users and imposing on them double the M-Pesa charges applicable to its customers, Safaricom was abusing its position as Kenya’s dominant provider of mobile phone-based money transfer services.  

Airtel has been pushing for sharing of mobile phone cash transfer agents and interoperability of the M-Pesa network accusing its rival of unfair dominance, charges that Safaricom has denied.

READ: Airtel challenges Safaricom supremacy in money-transfer industry

Safaricom has defended itself by arguing that it has invested billions of shillings developing its agency network, arguing that it would be unfair to be forced to open it up to rivals.

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

READ: Safaricom braces for opening of M-Pesa to rivals

The 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.

Safaricom’s M-Pesa client base stands at 18.1 million.

Airtel argues that since Safaricom’s mobile money agents account for about 88 per cent of the entire telecoms industry, most transactions take place on its network denying Kenyans choice by charging those outside its network double the costs.

“It is in the best interest for consumers to transact within and across networks seamlessly,” said Michael Okwiri, Airtel Africa corporate communications vice president recently.

In its upcoming ruling, the competition watchdog will detail its findings on whether the Airtel’s allegations hold any water. CAK will be seeking to establish whether Safaricom’s terms and agency rules restrict fair competition.

The authority will also take into account one of Safaricom’s main arguments that it has secured its current position by investing Sh1.2 billion every year into the network, something it says rival firms should emulate.

Even as it pleads its innocence on the matter, Safaricom is bracing itself to open up of its mobile money network.

Last month, the mobile operator seemingly softened its stance on the matter saying that there was need for clear rules to be set out on how interoperability will work. One of the things the operator says remains contentious is the sharing of earnings between competitor firms and their agents.

“As a mobile operator, and a member of GSM Association (GSMA), we shall be very keen to implement the agreed standards with all other operators both at a local and international level," said Nzioka Waita, the director of corporate affairs at Safaricom.

[email protected].com