Kenya’s CA distances itself from reports alleging Safaricom split

Kenya’s Communication Authority has refuted reports claiming that Safaricom is set to be split up due to its dominant status in the telecommunications competition market, after M/S Analysys Mason, submitted a draft report suggesting the split.

This announcement was made by Ngene Gituku, CA, Chairman, during a press briefing at the Authority’s headquarters in Nairobi, Kenya. Mr. Gituku explained the above mentioned company was contracted to undertake the telecommunications competition market study in May 2016.

“I am happy to note that the consultants undertook the study in close consultations with the industry and CAK and submitted a draft report to the Authority in mid-February 2017.  Subsequently the Authority shared the report with the Competition Authority of Kenya as part of the consultation envisaged in the ICT sector law. On 6th March 2017, the Competition Authority of Kenya reverted with comments, which CA is currently reviewing with a view to finalizing the report,” Mr. Gituku added.

According Mr. Gituku the study is yet to be released or finalized as it is set to undergo various stages before it is released. Once the ongoing review is completed, the Authority shall subject the report to a process of stakeholder consultation. The Authority is targeting to finalize and release the final report in May 2017.

“May I take this opportunity to set the record straight that the Authority has not released the competition study as purported in some quarters.  In the same breath, I wish to allay fears that the Authority is planning to split the business of players who are alleged to be dominant and thus create disruptions in the market,” he assured.

“The Dominant Market Power and Regulated Services reports will be released once the required processes as stipulated in the constitution, ICT sector law and the Fair Competition and Equality Treatment as well as the Tariffs Regulations have been concluded.  The rumors that are doing the rounds about the contents of the draft competition report are therefore untrue and unfounded.  I urge the sector and the public at large to totally ignore them,” he added.

During the briefing Mr. Francis Wangusi, CA, DG, stated that the CA wants the process of finalizing the study to be as transparent as possible and include as many views as possible. He further reiterated the CA’s stance on the issue of splitting up a dominant player in the Kenyan market.

“For us we are interested in coming up with a moderate way of making sure the industry is well competitive. Being dominant is not an abusive of dominance, what we are trying to do is try and guard this person with significant market power from stumbling on others but we are not stopping them from being innovative and expanding if the others are slumbering,” said Mr. Wangusi.

“It is not in our notion to take any drastic measures against any player that is going to disrupt or disorient our market to the ICT Sector because it is very important to have a significant impact,” he added.

Mr. wangusi added that the bill to split Safaricom was with parliament and assured that the authority was not involved in whether it would be passed or not. But as earlier reported, by CIO East Africa, according to Kenya’s ICT, CS, Joe Mucheru, the government is not interested in the split up of the telecommunications giant as it might stifle innovation within the country.

“In parliament, the proposed legislative amendment to split Safaricom and M-Pesa is therefore not one of the aims that the government supports, as it extends the negative precedence in vanishing and suppressing innovative operators, hence discouraging investments,” said Mucheru.