Communications Authority of Kenya (CA) has dismissed calls to conduct another study on competition in the telcoms sector. 

Reacting to proposals by the Kenya Private Sector Alliance (Kepsa), the industry regulator said there were no such plans, at least not at the moment. 

The calls threaten to rekindle the ever-lingering dispute between mobile operator Safaricom and rivals over abuse of market dominance.

“As far as I am concerned there are no such plans for now,” a CA official said at a recent media forum, adding that the authority would not take sides on the issue. 

However, the official said there have been a lot of positive developments and ongoing engagements with stakeholders since the last report was released and whose aim was to address concerns raised in the study. 

Kepsa had in a submission to the Senate committee on ICT last year called for another dominance study, five years since similar market scrutiny was undertaken but has never been fully implemented.

“There have been shifts in the telecommunications market in the past few years and the landscape continues to change. Since the last study the landscape has changed and we now even have tower management companies,” argued Kepsa on the issue at the time.

Officials of the lobby had appeared before the committee to offer a private sector view on market dominance by telecommunications operators, legislative and policy issues following claims that the market leader Safaricom had a competitive advantage over its rivals.

“A baseline of data needs to be established as well as the impact of the market shares, before looking at intervention measures to alter the market balance,” Kepsa recommended. The last competition study was undertaken in 2016 and recommended a more comprehensive study to be undertaken by CA, which had been tasked to provide insights into who was dominant in the various sub-sectors.

The regulator picked audit firm Analysys Mason to undertake a telecommunication competition market study between May 2016 and May 2017 but its findings were first made public in 2018.

It raised critical concerns such as interoperability among mobile operators, mobile voice, data and mobile money services with key issues being suggestions to split Safaricom’s M-Pesa and set it up as a standalone business entity following an uproar by rival Airtel Kenya.

Significant market power

The regulator tasked with the implementation role of the study was to among other things establish the levels and extent of competition in the various telecommunication sub-markets identified as well as ascertain players with significant market power.

It was also to identify the market barriers, if any, that prevent or restrict entry, competition and the growth of the players in the era of changing technologies.

After this it was expected to propose the best way by which the identified barriers and factors acting as a hindrance to growth could be considerably minimised or eliminated. Interoperability for instance, was expected to solve difficulties associated with mobile money transactions, where consumers have previously complained of costly and highly tedious processes of sending money across networks with the procedure often tilted in Safaricom’s favour owing to huge transaction tariffs set by the operator.

Small players have long maintained that Competition Authority of Kenya and CA should split up Safaricom and M-Pesa into separate standalone business units in order to compete favorably and open the market.

Rather than pocketing the proceeds from its innovation, Safaricom has argued that, it has ploughed back revenues to transform itself into the multi-billion shilliing firm it is today – with its M-Pesa unit today boasting over 30 million active Kenyan customers using the platform every month having launched 15 years ago.

Kenya remains M-Pesa’s most active market accounting for more than 30 million of the service’s 51 million customers across Kenya, Tanzania, Democratic Republic of Congo, Mozambique, Lesotho, Ghana and Egypt.