An M-Pesa agent serves a customer in Nairobi. Photo/FILE
What you need to know:
Airtel had petitioned the Competition Authority of Kenya (CAK) to compel Safaricom, Kenya’s biggest telco, to reduce the cost of sending money from M-Pesa to other networks.
Airtel also sought the agency to compel Safaricom to open up its M-Pesa agency network.
In the ruling CAK has directed Safaricom to open up its M-Pesa network, which however, comes weeks after the company announced that it had already allowed its agents to work for competing telcos.
The competition watchdog has declined to order a cut on fees charged for making mobile phone money transfers across different networks, handing Safaricom a crucial victory over its rival Airtel.
Airtel had petitioned the Competition Authority of Kenya (CAK) to compel Safaricom, Kenya’s biggest telco, to reduce the cost of sending money from M-Pesa to other networks.
It argued that Safaricom’s pricing of its mobile money services is anti-competitive because users of rival networks are charged more than the telco’s subscribers.
Airtel also sought the agency to compel Safaricom to open up its M-Pesa agency network. In the ruling CAK has directed Safaricom to open up its M-Pesa network, which however, comes weeks after the company announced that it had already allowed its agents to work for competing telcos.
The CAK board said that the ruling takes effect immediately.
“We did not make a ruling on the interoperability and the cost of transactions because we found that this is an issue that needs the input of both the Central Bank of Kenya and the Communications Authority,” said CAK director-general Wang’ombe Kariuki on telephone interview.
“This matter will also require the drafting of new laws.”
Although Safaricom had earlier said the opening up of its 85,000-strong M-Pesa agents network to rivals was a commercial decision that was not forced on it by any regulatory authority, Thursday CAK said it had instructed Safaricom to do so in its ruling delivered on July 12.
“We instructed Safaricom to end the exclusivity agreement that it had with its M-Pesa agents meaning that now Safaricom M-Pesa agents can transact business for any other mobile operator,” he added.
Mr Wang’ombe said that the exclusivity agreement was detrimental to the mobile money industry because it locked in some agents to a single operator, an arrangement which in some areas led to market dominance that CAK had sought to end.
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.
Safaricom has previously said that it is keen on interoperability – full integration of mobile money services – and that it was working with a global association for mobile operators to achieve this.
There is currently no interoperability in Kenya’s mobile money market, meaning that each company’s product is only directly accessible to its customers.
Safaricom treats cash recipients in other networks as “unregistered users” who can withdraw the money by presenting an SMS credit notice to an M-Pesa agent.
The telco charges between Sh3 and Sh75 for mobile money transactions in its network and between Sh60 and Sh250 for cross-network transfers, depending on the amount.
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