Economy

Telcos CEOs on the spot in push to declare Safaricom dominant

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Airtel Kenya MD Prasanta Das Sarma and legal and regulatory affairs director Joy Nyaga when they appeared before National Assembly’s ICT committee last Thursday. PHOTO | EVANS HABIL

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Summary

  • Five telecoms separately lobbied MPs for regulation to ensure a telecommunications firm that has more than 50 per cent market share is declared dominant.
  • Uriri MP Mark Nyamita accused Airtel and Telkom of being out of touch with market realities, poor infrastructure and expansion planning and lacking in customer care.
  • Safaricom dwarfs its top rivals, Bharti Airtel and Telkom Kenya, and smaller operators have long argued that it enjoys a dominant position because it accounts for 90 per cent of revenues in areas such as voice calls and text messages.

MPs put five top managers of telecommunications firms on the spot over their push for parliamentary intervention to amend the law to regulate market dominance and declare Safaricom #ticker:SCOM dominant.

The National Assembly’s ICT committee members dismissed the telcos plea seeking to declare one operator dominant.

Safaricom dwarfs its top rivals, Bharti Airtel and Telkom Kenya, and smaller operators have long argued that it enjoys a dominant position because it accounts for 90 per cent of revenues in areas such as voice calls and text messages.

The committee chaired by William Kisang separately questioned Telkom Kenya chief executive Aldo Merause, Aritel’s Prasanta Das Sarma, Joshua Chepkwony (Jamii) and Liquid general manager for legal Judy Njeru over the dominance claims.

“We are in a free market where the market corrects itself naturally without government intervention. Why would you want Parliament to punish success when one player is doing better than the rest of the telecommunications firms?” Mr Kisang asked.

READ: Consultant revises position on splitting Safaricom

The five telecoms separately lobbied MPs for regulation to ensure a telecommunications firm that has more than 50 per cent market share is declared dominant.

Safaricom controlled 66.5 per cent of the voice traffic in the three months to March, Airtel (28.7 per cent), Telkom Kenya (4.6 per cent) and Finserve (0.3 per cent).

Safaricom rejects the claims of dominance and it has in the past accused authorities of being preoccupied by helping its ivals rather than focusing on consumers.

Uriri MP Mark Nyamita accused Airtel and Telkom of being out of touch with market realities, poor infrastructure and expansion planning and lacking in customer care.

“You have changed hands frequently and that affects your strategic direction. As a former Airtel employee, I know that Airtel suffers because of the missteps of its predecessors, starting from KenCell,” Mr Nyamita said.

Communications Authority of Kenya early this year ditched a proposal to break Safaricom up into separate telecoms and financial services businesses due to its dominant size.

An initial draft report on boosting competition in the sector, which was leaked in February 2017, had recommended the break up of the firm that is Kenya’s biggest by market value.