Safaricom defends market share

SAFARICOM accused Kenya’s telecommunications regulator of failing to enforce investment requirements for smaller competitors in return for their licences, meaning the market share of East Africa’s biggest listed company went unchallenged.

Kenyan lawmakers are studying a report by UK-based advisory group Analysys Mason that found Safaricom to be a dominant player in mobile money and mobile communications.

It recommended the company open its mobile-money platform, known as M-Pesa, to transfers from competing services at prices determined by the regulator. It also proposed that the company be broken up if competition does not improve.

Failures by the Communications Authority (CA) “have contributed to the large disparity in the number of base transceiver stations owned by Safaricom compared with other operators, and we should not be punished for this”, the Nairobi-based company said in a submission to Parliament.

The CA-commissioned study did not find that Safaricom abused its dominance, and proposed multiple regulatory interventions without providing evidence of market failure, the company said.

Safaricom, which is 40 percent owned by England-based Vodafone, has a 67 percent market share. Its closest rival is the local unit of Bharti Airtel, with 19.7 percent.

Safaricom’s M-Pesa is a market leader and processed about 1.88 trillion shillings (R248 billion) in the second quarter. – Bloomberg