In the past seven days, a lot of things have graced the telecom business in the country. To begin with, Safaricom’s CEO Bob Collymore resumed his duties after a 9-month medical leave in London and Airtel Kenya permanently slashed its call rate to a modest Kes 2 per minute to any network, for which Safaricom’s CEO had the following to say:
“Our competitors drop their prices… This results in low returns, which means that they do not have the revenue to innovate. Next, you will hear them blame Safaricom.”
It is a valid point that was obviously targeted toward Airtel/Telkom that continue to serve their customers with the best deals in terms of data, SMS and voice – a move that is yet to gainfully net them more customers thanks to Safaricom’s larger market share, robust infrastructures and additional services that cannot be rivalled by other players.
The friction between carriers has been around for some time. It can be traced back to the deployment of LTE services that were pioneered by Safaricom. Both Telkom and Safaricom Kenya had paid full licensing fees to the CA, but Airtel had an issue with the ICT watchdog because it felt that the Kes 2.5 billion price was on the higher side considering its business was smaller, ergo, lesser revenues. The matter escalated to court but was settled because the CA gave a nod to Airtel’s 4G rollout.
The complexities of this row are unknown to us because there are many things we can never really know. However, on the outside, many deductions can be made based on what we can gather from forums that have since been staged to ensure that the telco business is fair to all parties. One of such forums was held in parliament last week, for which the CAK defended Safaricom. Apparently, the operator is by no means dominant, nor has it appeared to abuse its position to disfavour the growth of others – but Airtel argues otherwise by stating that Safaricom’s market share surpassed the 50 per cent mark years ago, which makes it dominant by definition.
The metrics used in the meet between regulators and Parliament’s Departmental Committee on ICT were gathered by Analysys Mason’s study that set out to establish the degree of competition and its merits/demerits in the telecoms market in Kenya. Mason’s report recommended Safaricom to present invariable loyalty schemes, standard tariffs, and promotions that can be reproduced by others. At the same time, Mason suggested a flat rate for all mobile money transactions across all platform sans extra fees.
Of course, these measures are not going to be put in place without digging into their implications. CAK, for instance, said that touching M-PESA services would affect many sectors of the economy.
Together with the committee’s input, the report is going to be scrutinized in the coming days, but as it appears now, the fate of whether Safaricom is dominant or otherwise is in Parliament’s hands. Whatever verdict they will come up with should help address the concerns raised over the course of the tussle.
The Committee will announce its recommendations in the coming weeks.
