Recent M-PESA Outage a Rude Reminder for Authorities to Review Telco Competition



MPESAWhile key players in multiple industries have participated in a series of discussions in recent months about the alleged dominance of several products and services, the country’s carrier business is probably the most hit in competition management and policy. It has now been established that citizens and businesses will suffer and lose a significant share of their profit margins if a mobile money service they rely on fails even for a few minutes or as it was the case yesterday evening, a couple of hours. This major setback implies that the dominance of a single and powerful mobile money product forces millions of Kenyans from all walks of life to suffer from lack of choice, and going by the outrage we saw on social media platforms, the hitch that affected Safaricom’s M-PESA was severe and costly.

Safaricom has often argued that they have invested a lot of money in research, innovation and staffing requirements to be where it is, hence should not be subjected to dominance talks that target to punish it for having the edge over competitors, but we know better.

The sluggishness in addressing the possible abuse of M-PESA’s edge over the likes of T-Kash and Airtel Money appears to be pegged on the belief that the telco market in the country will probably correct itself, but as we have come to learn, the market has no capacity to decide for customers who are primary victims of outages. In other words, the market lacks the will to decide what’s best for its customer base; rather, Safaricom, as a key business in the telecoms sector, should make open its arms for other players to determine the quality, availability, and diversity of mobile money products.

It may also be assumed that the dominance talks are not being pursued with the seriousness they deserve. This has given rise to tolerance and encouragement of the situation that has inhibited rivals, in addition to setting back innovation and investments. These discussions have since been highlighted by the likes of Telkom Kenya, whose former CEO Aldo Mareuse argued that the situation was only comparable to the monopolies before liberalization and urged for improved industry regulation.

Safaricom’s response, which merely offered an apology and the cause for the service outage, has not been supplemented with a further and comprehensive explanation. It should also be noted that this is the third stint of a service outage in less than two years.

We think this is the time for policymakers and relevant authorities to review competition in the telco sector to protect consumers and businesses that depend on these services because it is highly likely Kenyans will be held hostage, again, in coming days should the outage be replicated.


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