Airtel challenges Safaricom supremacy in money-transfer

June 4, 2014
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Airtel is teaming up with Equity Bank Ltd, the country’s biggest lender by market value, to begin operating a mobile-phone banking product in July/FILE
Airtel is teaming up with Equity Bank Ltd, the country’s biggest lender by market value, to begin operating a mobile-phone banking product in July/FILE
NAIROBI, Kenya, Jun 4 – Airtel Networks Kenya Ltd, which is targeting a share of Kenya’s mobile-money transfer business, asked the country’s competition authority to probe Safaricom Ltd for allegedly abusing its market-leading position.

Airtel is teaming up with Equity Bank Ltd, the country’s biggest lender by market value, to begin operating a mobile-phone banking product in July. The service will compete with Safaricom’s M-PESA, a system that enables users to send money by mobile-phone and generated Sh26.6 billion ($303 million) of revenue for the company last year.

Safaricom, in which Vodafone Plc has a 40 percent stake, had 78 percent of the voice market, 96 percent of text messaging and 74 percent of mobile-data and Internet traffic in the final quarter of 2013, according to data from the State-run Communications Authority of Kenya.

Airtel, Kenya’s second-biggest mobile operator after Safaricom, recorded 11 percent, 3 percent and 15 percent in those categories, respectively.

“Currently there is a dominant player in the market and this makes it impossible for Kenyans to make a choice,” Airtel Kenya Chief Executive Officer Adil El Youssefi said in an interview on May 25 in the capital, Nairobi.

Since cash transfers still account for 98 percent of total transactions in Kenya, it’s impossible for any mobile-money entity to be a dominant player in the payments market, said Safaricom Corporate Affairs Director Nzioka Waita in a May 28 e-mailed response to questions. “I would hesitate to rush to any empirically unsubstantiated assumptions about dominance or abuse therefore,” he said.

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