Telecom market in need of competitive boost, ICT CS
The un competitive nature of the telecom sector has drawn the attention of the Communications Authority as well as the Ministry of ICT.
These even as plans are in motion to split the business of Safaricom in a bid to stimulate competition.
However ICT Secretary Joe Mucheru said there are other tools that could be used to ensure the other two telecom companies become competitive.
For instance the ministry is considering plans to make industry players share resources to ensure they have equal opportunities to grow their business.
“In parliament the proposed legislative amendment to split Safaricom and M-Pesa is not one of the aims that the government supports as it would send the negative precedent in punishing and suppressing innovative operators hence discouraging investments.”
“It does not require that you have to split companies on the basis of just law and therefore we hope to take into account the competition environment and we and the Communications Authority are looking at remedies that will be put in place,” Mr Mucheru said during the ongoing Innovation Week at the University of Nairobi.
A draft report by consultancy firm Analysys Manson proposed the splitting of Safaricom’s voice and M-Pesa business.
The move has however not been taken kindly by Safaricom which argues it amounts to being punished for its ability to innovate.
“We do not believe dominance in itself is a crime. If you have players who are not as efficient, you cannot blame the ones who are efficient,” Safaricom chief executive officer Bob Collymore said in February.
Despite enjoying market leadership, the Competition Authority and the telecoms regulator have been unable to pin whether Safaricom has used its reach to lock out other players.
Mr Mucheru however said the industry needs a jolt with the push for shared resources now on the table in a bid to level the playing field as it were.
“This includes 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,” he said.
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