Anti-trust rules won’t fix telcos woes

I just don’t think that the government has thought through a clear strategy on how it wants the mobile telephone sector to grow and evolve, especially after it torpedoed the proposed merger of Telkom Kenya and Airtel Networks two years ago.

Have we all agreed that the long-term interest of the country and of consumers of mobile services is to have a consolidated sector with one strong national champion?

Are we satisfied that the consumer of mobile services enjoys adequate protection in terms of price and quality of service?

Let’s face it, we don’t have an anti-trust framework worth talking about. Competition regulation just doesn’t happen in Kenya and anti-trust laws are honoured more in breach than practice.

The last time the Communications Authority of Kenya (CA) tried its hand at implementing a new competition regime for the telecommunications sector, it came up with anachronistic ideas that had long been abandoned by many anti-trust authorities.

In this day and age and in an environment of globalisation and global supply chains, you will be laughed out of town when — as a regulator or anti-trust authority — you approach competition regulation by placing emphasis on concepts such as ‘ market dominance’, ‘ abuse of market power’ or ‘concentration of market power’.

Look at the battles between anti-trust authorities with technology behemoths such as Facebook, Google and Amazon.

The fight Chinese authorities have been having with Alibaba is yet another indicator of the changing times. When you look at the trends, the picture you see is that anti-trust authorities are no longer obsessed with breaking up companies into smaller pieces ostensibly to correct concentration of economic power.

Instead, and as far as technology companies are concerned, anti-trust authorities are more keen to secure and grant equal access to platforms to competing companies. As a tech company, you are most likely to be punished when you are found offering similar services which your competitors are offering on your platform.

In my view, we are at a point where our priority now must be how to build strong national champions — not just slicing up companies in the name of breaking monopolies.

We should be thinking about growing national champions into continental players. That move by Safaricom to go into Ethiopia made a great deal of sense to me.

Policy should encourage and guide this national champion to graduate and start playing in the same league with companies like MTN of South Africa and Orascom of Egypt.

I am encouraged when I see our power producer and national champion, KenGen, winning one contract after another to drill geothermal wells in Ethiopia and Djibouti. KenGen should spread its wings to West Africa.

The Kenya Tea Development Authority (KTDA) is another good example. Admittedly, the government in its wisdom may very well be right in seeking to reform KTDA. But we should not — in the name of breaking a monopoly — think about cutting this national champion into pieces. We behave as if we have forgotten that this is the largest tea marketing company on planet earth.

We are at a point where we must now accept that the anti-trust framework we have been trying to implement in the mobile telecommunications sector is no longer fit for purpose.

The CA publicly disseminated a telecommunications competition study that was conducted on its behalf by the consultant, Analysys Mason.

That study was also subjected to discussion by the industry’s stakeholders. The consultants came up with a framework that supported the breaking up of monopolies in the sector.

There was a proposal to force Safaricom to operate M-Pesa as a separate company. They proposed a regime or do’s and don’t’s to control abuse of market dominance.

The new anti-trust regime did not see the light of day.