CA forces mobile operators to share money transfer infrastructure

1 December 2017

Money Transfer

The Communications Authority of Kenya will force mobile phone operators to share money transfer infrastructure from next month. CA Director-General Francis Wangusi said negotiations by telecommunication service providers to set up an interoperable mobile wallet have since stalled and the authority will be forced to step in.

“The operators agreed by themselves that they will have the system ready by July,” explained Mr Wangusi. “The CA was not an active party to their discussions and ours was to see that the agreement they came up with was in the provisions of the law.” Wangusi said the telco industry regulator will begin implementing recommendations of the report on dominance starting next month. This is expected to usher in a new era of operations in East Africa’s largest technology market.

Wangusi said the regulator had exhausted all stakeholder consultations and was ready to make the report public and begin implementing the far-reaching recommendations. “We are going to have the final stakeholder meeting next Thursday after which the next steps will be implementation,” he said. In 2015, CA commissioned UK-based research firm Analysys Mason to conduct a study on competition in the country’s ICT sector following reports that Safaricom had become dominant in voice and mobile money and could be using its position to edge out competition.

Preliminary findings into the draft report found Safaricom to be dominant on both voice and mobile money, holding more than 80 per cent of the market share in both market segments. The report further said the telco was also dominant in terms of network infrastructure, owning the bulk of cellphone towers in marginal and low populated areas.

However, Safaricom has insisted in the past that it has never abused its dominance in those market segments. Analysys Mason recommended an interoperable mobile money platform be established to allow sharing by other mobile money transfer service providers and consumers. “Safaricom should work in good faith with the other mobile money licensees, the CA, the Competition Authority of Kenya (CAK) and the Central Bank of Kenya (CBK) to implement a system to enable automatic and near-instantaneous transfers to and from users of other mobile money platforms by December 31, 2017,” states the report in part.

Early this year, ICT Cabinet Secretary Joe Mucheru sought to broker an agreement among Safaricom, Airtel and Telkom that would have the three service providers establish the interoperable mobile wallet. According to insiders, however, the project was derailed by failure of the members to reach a consensus.

At the same time, Telkom was going through a re-branding process that saw the telco shut down its mobile money service Orange Money, promising to unveil a new, more advanced version this year. It is yet to launch its mobile money platform. “They told me they are ready to launch but I think for some reasons or intricacies that required another third party to help them, they didn’t do that and therefore we are going to solve this through the competition study report,” he said. Safaricom, however, denied that the negotiations between the service providers had stalled, insisting that they were still on course.

Source: Standard Media