Regulators Deny Rumours That They Will Split Safaricom

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CA denies rumours that it will split the dominant business player in Kenya’s telecommunications market.

The Communications Authority of Kenya this week released a statement denying the claims of splitting the business of market players in the telecommunications sector amid recent speculations over drastic measures to be taken to create disruptions in the sub-sector.

The CA which is responsible for facilitating the development of the communications sector in Kenya and is required to regulate competition in the sector recently released a study in line with this with a view to establishing the degree of competition and its effectiveness in the various telecommunications markets.

The study, carried out by Analysys Mason on behalf of the Authority, concentrated on pinpointing relevant markets in the telecommunications sub-sector, the number of players available and their overall market share & establishing the anticompetitive behaviour as well as evaluating the extent that this has helped players entrench dominance in the sub-sector.

In a press statement released on 14 March, the Chairman of Board Directors of CA, Mr Ngene B. Gituku addressed the rumours that have been circulating concerning the split or the action to destabilise some dominant market players. He went further to address the fears that people had that the Authority was planning to punish the success of these key players.

This comes in the recent wake of rumours that Safaricom would be split into two firms with the aim of running M-Pesa as a separate business from the telecoms service. This rumoured move which was later confirmed by CEO Safaricom Bob Collymore as false, would not only discourage investors as well as suppress innovative operators, it would also have a high cost of operation on customers.

Speaking on this Mr Ngene said that it was the mandate of the CA to develop, promote and monitor fair completion among key market players in the ICT industry and the Authority would pursue modest market interventions to level the playing field. He added that together with the Competition Authority of Kenya (CAK), the CA’s responsibility of monitoring competition is motivated by the need to protect ICT users from unfair business practice.

In addition to this, the M/S Analysis study dived into establishing the degree and extent of competition among various telecommunications market and identifying those who command greater power. Another objective was to determine the market barriers and the proposal of remedies to mitigate those that hinder growth, among other targets.

The firm concluded its studies and submitted its draft report to the CA on February 2017 and has been consulting with CAK in accordance with the ICT sector law. In this regard, the Authority shall engage industry players and other interested parties for further comments and finalise and release the final report in May 2017.

It’s also important to note that the CA’s mandate is to foster the growth of the telecommunications subsector, thus dismissing the rumours made above that would be detrimental to sector growth and consumer welfare. Conversely, growth in the ICT sector, as well as the promotion of customer welfare, is fostered by the competitive nature of the telecommunications industry. It also spurs social and economic development through innovation and similar activities giving a fair ground for healthy competition and the birth of new ideas & innovations crucial to the growth of the market.

Featured image from www.cio.co.ke/.

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