NAIROBI, Kenya, Jan 15 – Airtel Kenya has said the government’s planned partial exit from Safaricom Plc will not, on its own, change competitive dynamics in the telecoms sector, instead urging regulators to address structural market imbalances, particularly in call termination charges.
Appearing before the National Assembly, Airtel executives argued that ownership changes at Safaricom are secondary to the regulatory framework governing the industry, citing the Mobile Termination Rate (MTR) as a key barrier to fair competition.
The intervention comes as the Institute of Certified Public Accountants of Kenya (ICPAK) questions the National Treasury’s decision to sell its 15 percent stake in Safaricom through a single-bidder process rather than an open tender.
Airtel told lawmakers that the current MTR regime disproportionately disadvantages smaller operators. Under the system, telecoms firms pay each other to terminate calls on rival networks, with smaller players typically paying more due to Safaricom’s larger subscriber base.
“When one operator dominates the market, more calls originate from smaller networks and terminate on the dominant network,” an Airtel executive said. “This results in smaller players paying significantly more in termination charges, diverting capital that could otherwise be invested in network expansion.”
The company argued that lowering MTRs to near-zero levels would reduce operational costs and allow operators to pass savings to consumers through cheaper voice tariffs.
While Airtel focused on operational competitiveness, ICPAK raised concerns over the financial structure of the Safaricom transaction. Appearing before the National Assembly Finance and Planning Committee, ICPAK representative Sandeep Maina questioned whether the direct sale of the stake to Vodafone Kenya for about US$1.6 billion (Sh204.3 billion) achieved optimal value for taxpayers.
ICPAK challenged the Sh34-per-share valuation, saying the absence of competitive bidding limited price discovery and may have foreclosed the possibility of higher offers.
In response, the National Treasury defended the single-bidder approach, describing it as a safeguard against valuation risk. Officials argued that an open bidding process could result in lower offers, weakening the government’s negotiating position.
The Treasury also ruled out private equity buyers, citing past challenges with Helios Investment Partners at Telkom Kenya, and dismissed a public offer on the Nairobi Securities Exchange, warning that it could strain capital markets ahead of the planned Kenya Pipeline Company listing and require costly underwriting.
Treasury officials maintained that Vodafone Kenya’s position as an existing shareholder justified a “continuity premium,” arguing that a new investor would likely discount the valuation to account for unfamiliar operational and regulatory risks.
Separately, Airtel disclosed that it is engaging the Central Bank of Kenya on issues related to mobile money regulation, signalling a broader push for regulatory reforms across both voice and financial services to address market dominance.
