Safaricom let off the hook by UK regulation consultants
Safaricom, Kenya’s largest cellco by subscribers, has been vindicated in its battle against stringent new regulations introduced by the Communications Commission of Kenya (CCK). After Safaricom threatened the regulator with legal action, Information Minister Samuel Poghisio hired UK consultancy firm Frontier Economics to review the country’s new competition rules. According to documents viewed by Business Daily, Frontier Economics found key aspects of the contested rules to be out of line with international best practices, and recommended that they be revised or struck out altogether.
Citing the European Commission’s telecom sector competition rules – which stipulate that a player must have at least 40% to 50% of market control to be declared dominant, rather than the 25% figure used in Kenya, which is also the figure used in Senegal. However, whether the figure is either of these numbers makes no practical difference as Safaricom controls 81.5% of the Kenyan wireless market.
Frontier Economics have also suggested that the CCK cut the 90 days notice clause regarding new tariffs to 30 days, reducing the chance of Safaricom being upstaged by its smaller rivals. In addition, Frontier Economics suggests that the CCK should lose the power to adjust tariffs independently, recommending that the watchdog should advise the operator about proposed changes without being specific about the mooted tariffs.