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Kenya regulator under fire for timid approach to Safaricom’s dominance

Kenya regulator under fire for timid approach to Safaricom’s dominance

The Communications Authority of Kenya (CA) has come under fire from several of the country’s operators for shelving its recommendation to split up market leader Safaricom.

Safaricom is by far the most dominant operator in Kenya, spurred by its widely-used m-Pesa mobile money service. The CA had drafted proposals that would have obliged Safaricom to implement full interoperability between m-Pesa and rival mobile money services, as well as splitting up its wireless and mobile money units.

However, these proposals have been significantly watered down ahead of their public release later this month, prompting criticism from Airtel Kenya and Telkom Kenya. The CA has stated that the alterations were the result of feedback from stakeholders.

Safaricom’s dominance in Kenya is a bone of contention, with a recent Analysys Mason study of the country’s communications sector identifying Safaricom’s market share as “unusually high” for a three player environment. The CA’s Q3 statistics indicate that the operator claims 72% of wireless connections and 81% of mobile money users.

The study had originally recommended stoking competition in the mobile money market by forcing Safaricom either to spin off m-Pesa or introduce interoperability. Leaked to the media in February 2017, the plan to split up the operator swiftly gained traction with the support of national assembly member Jakoyo Midiwo.

However, several ministers opted to side with Safaricom, and in March 2017 the CA stated that it would not force Safaricom to spin off its mobile money unit. Interoperability however remains on the table, with providers holding ongoing discussions with the CA in an attempt to bring about the policy.