Safaricom rivals must innovate and invest to compete


A Safaricom transmission mast at Kiratina in Nakuru. FILE PHOTO | NMG

Wednesday’s editorial by the Business Daily, ‘Enforce fair competition rules for telecoms firms’ (print) made me concerned about several issues.

To begin with, there is nothing new about the conversation on Safaricom’s position in the market.

This issue has occupied acres of space in Kenyan newspapers over the years. Safaricom’s competitors have repeatedly argued that the company should be declared dominant in the market and be penalised for this.

Safaricom has highlighted the injustice in such action. They have argued, and rightfully so, that what their competitors are asking for is for the government to punish them for success.

In part to address this, the regulators have conducted several studies on the same. However, to this date, they have not declared Safaricom dominant.

The question that this raises to the keen observer is why. In fact, the most troubling thing about the editorial by the Business Daily is that it raises this issue but leaves it unexamined.

What they are indicating is not that the regulators may be acting based on their knowledge and understanding of markets; rather, they are suggesting that the regulators are not doing their job.

In the piece, they say, ‘regulators must do their job.’ What, pray do tell, is the job of the regulators? Are they to be said to have done their job only if they declare Safaricom dominant?

If that is the argument that the Business Daily wants to make, they must do so outright. They must then also tell their readers what they know about the market that the regulators do not, the effect of such action on the all stakeholders in the industry, and who will benefit from such actions.

What I find even more troubling is that they then proceed to present their view on what happens when a firm is dominant in the market. What they offer is a theoretical perspective.

Rather than engaging hypotheticals, the Business Daily should look at the evidence, including what they have published on the matter. For instance, just last year, they published an article titled ‘CAK defends Safaricom over abuse of dominance claims’.

In that article, they reported that the regulator, in their compliance checks, had not found any practices that had exposed its rivals to unfair competition.

One must wonder: Is the Business Daily suggesting that they have new information about the nature of Safaricom’s business practices or are they simply choosing to ignore the evidence they have on the issue.

To be clear, as I have followed this debate for a while now, no one is disputing the fact that Safaricom is the largest player in the sector. Similarly, no one is saying — I am certainly not — that fair competition is not good for the market.

No one has said that it would be bad for the competitors to do well. The question that is being asked of those who challenge Safaricom, and which must be discussed soberly is this: why has Safaricom become successful, as its competitors have struggled to gain market share?

Space does not allow me to explore this fully but, as I have said, many of these points have been raised before. Still, I need to reiterate here that, historically, Safaricom was not always the big player in the market. They became so because they innovated and invested.

This can be replicated not by regulations but by investing and innovating. Maybe the competitors should try that too.

Moreover, perhaps the Business Daily should not wade into ongoing debates in a manner that will cause readers to question their objectivity.

Anderson is a technology consultant. [email protected]