NAIROBI, Kenya, Nov 2 -Mobile and telecommunications service provider Safaricom Tuesday dismissed claims of market dominance amid complaints by its competitors Telkom and Airtel who have accused the Communications Authority of Kenya (CAK) of failing to declare its dominance.
Safaricom, while making its submissions to the Senate Departmental Committee on Communication, Information and Innovation said it did not have any market power and therefore it could act independently of other players and consumers.
“It is our position that there should be no adverse regulatory actions that would stifle the growth of the industry. There is room for a great investment in the industry and we look forward to seeing additional investment by other players into the market,” the firm said.
Airtel had dragged the regulator into its woes with Safaricom accusing it of failing to declare the telco firm dominant in the retail mobile money market despite the telecommunication competition market study done between 2016 and 2017 confirming their dominance.
The firm had argued that Safaricom market shares are above the dominance threshold of 50 percent in the law but the regulator has failed to declare its dominance.
Safaricom’s Chief Executive Officer Peter Ndegwa, however, argued that it had not undertaken any activity that has lessened or in any way affected the ability of its competitors to compete further adding that” Safaricom’s market share has been steadily decreasing year on year to the current levels which show that competition is gaining and growing.”
He called for an adequate incentive for continued investment in the telecommunications industry with proportionate obligations for infrastructure investment for each player in the market.
The firm noted that the risk of adverse regulatory action on Safaricom’s infrastructure investment shall lead to a market distortion where smaller operators will deprioritize investment and consequently, larger operators will be disincentivized from further investment.
“Any adverse regulatory interventions will have an impact on direct and indirect employment levels and shall affect the level contribution we make to taxes and dividends. In addition, it shall also send the wrong signals to domestic and foreign investors thereby significantly stifling enterprise and innovation,” Ndegwa said.
Other complaint issued by Airtel is the uneven allocation of the mobile spectrum with Safaricom having 82 MHz, Airtel 50 MHz, and Telkom 37.5 MHz
As of June 2021, Safaricom accounted for 64 percent of the market share followed by Airtel and Telkom at 27 and 6 percent respectively.
“The market share trends vividly demonstrate that market forces cannot correct the market situation without a deliberately regulatory intervention by the CA,” Airtel said.
As part of their recommendations, it had proposed “fair allocation of spectrum, dominance declaration, implementation of Asymmetric Mobile termination rates/reduction of MTR and publication and implementation of telecommunications competition market study. ”
