Report Recommends M-Pesa to be Detached From Safaricom to Reduce Market Dominance

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The Communications Authority of Kenya (CA) hired Analysys Mason – an independent international consultant – to look at the country’s telecommunication and broadcasting industry on market dominance and anti-competitive conduct, back in Mid 2016.

In a yet-to be published report seen by the Business Daily, the consultant recommends that M-Pesa be detached from Safaricom by December 2017, unless all mobile money services in Kenya can interoperate. The report found that Safaricom is able to set tariffs independent of the market forcing customers to pay higher tariffs compared to similar mobile money platforms across the world.

“The two businesses would be required to operate in separate offices, with separate staff below board level, separate branding, separate accounting and separate business operations and support system, customer support systems and management information systems,” the report says.

Although the report has not directly accused Safaricom of abuse of dominance, it raised concerns on the favoritism towards Safaricom’s partners like the Kenya Commercial Bank (KCB) – which runs KCB M-PESA – and the Commercial Bank Of Africa (CBA) – which hosts M-Pesa and M-Shwari – could be seen as uncompetitive.

Safaricom’s CEO, Bob Collymore has opposed the recommendations, saying “I am pretty hostile to the Idea. We can’t have other people dictating whether we break up our company or not.” Airtel Kenya declined to comment while Telkom Kenya did respond to queries on the subject, as reported by Business Daily

Analysys Mason proposed a wallet-to-wallet interoperable system that would allow a consumer to keep cloud accounts across different mobile money platforms, making it possible to move money across accounts as one chooses. The consultants also recommended the establishment of an ‘agent-to-agent interoperability’, where agents support multiple mobile money platforms.

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