Court restores CA’s powers to punish errant telcos

What you need to know:

Justice George Odunga faulted the changes to the law fronted by the government in December 2015, requiring the CA to consult the Competition Authority and the Communications minister before punishing any operator for abuse of dominance.
The court’s decision gives CA a freer hand to oversee the sector at a time of intense debate over whether or not Safaricom has too much market power.

The High Court has quashed legal amendments which denied the Communications Authority of Kenya the mandate to monitor and punish telecommunication firms abusing their dominance.

Justice George Odunga faulted the changes to the law fronted by the government in December 2015, requiring the CA to consult the Competition Authority and the Communications minister before punishing any operator for abuse of dominance.

The court’s decision gives CA a freer hand to oversee the sector at a time of intense debate over whether or not Safaricom has too much market power.

“In my view an amendment that has an impact on either the letter or spirit of the Constitution, however remotely, cannot be termed as minor non-controversial and generally housekeeping amendments,” said Justice Odunga.

The government argued at the time that it wanted to enhance decision-making on dominance issues by bringing in another body with expertise on competition matters.

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CA said however that the move undermined its independence and would discourage investment in the sector because it restricted its ability to manage competition. The suit challenging the amendments was filed by activist Okiya Omtatah.

Smaller operators like Airtel and Telkom Kenya have long alleged unfair competition, saying Safaricom #ticker:SCOM is too dominant. Safaricom rejects the accusations.

The CA commissioned a study on competition in the sector, whose leaked draft earlier this year showed Safaricom could be broken up due to its size and dominance of the mobile financial services market with its M-Pesa platform.

The regulator has since clarified it did not intend to break up any firm but it would explore other options to level the playing field.

Safaricom is Kenya’s biggest telco on both traffic and subscriber base. It controlled 80.6 per cent of the voice traffic in terms of minutes of calls on its network, dwarfing Airtel (13.5 per cent) and Telkom Kenya (5.4 per cent).