Safaricom off the hook as regulator rules out splitting of its business


Safaricom off the hook as regulator rules out splitting of its business
Safari com CEO Bob Collymore, Chairman during full year results release

After weeks of uproar, the Communications Authority (CA) has said it has no plans to split up the business operations of Safaricom.

The remark by the telecoms regulator comes after a leaked draft report prepared by Analysys Manson recommended for Safaricom’s voice and mobile money business, M-Pesa, be split.

This as a result of perceived dominance by Safaricom, which controls 69 percent of the market.

But according to the Communications Authority Chairman Ngene Gituku, the report by consultancy firm is still under review, adding the authority also does not advocate for the splitting up of any firm in the industry.

“I wish to alley fears that the authority is planning to split the business for some market players or take such drastic actions that may destabilize dominant market players,” Mr Gituku said.

The Communications Authority commissioned the competition study last year amid concerns by other sector players of the relative advantage enjoyed by Safaricom.

The regulator said the report on dominance in the telecom market would be ready by mid May.

“I would like to clarify that dominance in any market segment is not in itself an offence. It is the abuse and the potential of the abuse of dominance that must be regulated,” he said.

The report is expected to determine areas where sector players may collaborate more to ensure the industry remains competitive.

Airtel Kenya and Telkom Kenya have over the years struggled to turn a profit in the market.

In 2014, Esser’s Yu made the decision to exit the market.

Mr Gituku however said there was need to jolt competitiveness back into the telecom market

The remarks echo those of ICT Cabinet Secretary Joe Mucheru who seemed to suggest that there are other tools that could be used to spur competition in the industry.

“These include interoperability of mobile money, sharing of towers and even adjusting prices and so on. There are many methods of being able to ensure there is fair competition without having to split companies,” Mr Mucheru said last week.

The Communications Authority is currently discussing the report with industry players in an effort of getting common ground on areas players could work closer together without necessarily infringing on investments made by Safaricom.

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