CAK Insists Safaricom is Not a Dominant Player, Advises Against Regulatory Interference

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Safaricom’s popularity in the Kenyan market is obvious and widely known. It is the most profitable corporation in the country as it rakes in billions of shillings in revenue, cannibalizes other players in terms of market share and is unquestionably the most reliable operator any person can opt into. Its business model, and what it represents, has, for the most part, been perceived in a bad light by competitors who are still struggling to make a name for themselves in the fiercely competitive and lucrative telco business (at least for Safaricom).

The animosity among local carriers has since been studied, where some have suggested that Safaricom demonstrates an institution that is abusing its stand by fronting practices that are perceived as abusive. In line with this line of thought, Members of the Legislative Council are yet to air their say, and amidst the obvious limbo, the Competition Authority of Kenya (CAK) has chipped in quickly in support of Safaricom; that a decision from Parliament that will appear to punish the telco will be in bad light based on economic consequences that will emerge afterward.

Simply put, CAK argues that Safaricom has not done anything wrong to necessitate regulatory action. Thus, it is imperative the telco is left alone and continue to carry out its mandate as before.  Additionally, CAK says that a move to make changes about its operations will have far-reaching effects in the financial market and other areas related to it.

According to the Business Daily, CAK’s CEO Mr. Wang’ombe Kariuki referred to CA’s numbers that show Safaricom has lost a section of its market share and stands at 67 percent at the moment. This drop demonstrates that Safaricom does not have Significant Market Power (SMP) over competitors, hence it will be uncalled for to slap the telco with regulatory actions.

Grievances

One of the suggestions given by Kenya’s ICT watchdog is to compel Safaricom to share its transmission sites with other players. At the same time, it has since been recommended that Safaricom should share its mobile money outlets to bolster fair competition. The former suggestion has since been rejected strongly as Safaricom argues that it should be punished for its success, which also means that rivals should follow suit and build a robust infrastructure. The telco was however found guilty of restricting their mobile money agents to doing their trade with Safaricom products only. This move has since been rectified.

The course of this tussle is unknown, so we will have to sit back and watch how it pans out in the long run.

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