Kenya: Telkom calls for relook at rivalry

30 November 2018

Telecoms

Telkom Kenya wants the market dominance of a single operator in the telecommunications industry broken as recommended by advisory firm Analysys Mason.

Newly appointed chief executive Mugo Kibati said on Friday that other investors in the industry were keen to make a return on investments, which would require a more even playing field than is currently the case.

Without naming Safaricom, Mr Kibati said there was a stranglehold on the industry by the company making it virtually a monopoly.

“You have a virtual monopoly. It is not customers or the consumer who is king, the operator is king. The finding on dominance in that report (Analysys Mason) should be a starting point; we should operate in more competitive and fairly more regulated space,” said Mr Kibati.

Safaricom has defended itself against accusations of dominance in the industry, arguing it has not abused it.

Even the report did not find evidence of abuse, the giant has insisted.

Mr Kibati spoke shortly after signing a seven-year Sh4.1 billion loan from the European Investment Bank in Nairobi.

He said the company needed to make a return on investment, but the current dominance by Safaricom served as a major challenge to Telkom as well as other operators. “Ours is the most concentrated market in the world in the telecoms industry; we shouldn’t punish success, yes, but we need to address what is a virtual monopoly; we only want to see everybody else making a return on what they have invested. With market concentration the end user is disadvantaged. Regulations across the world have recognised dominance and gone ahead to address it,” he said.

Safaricom Chief Executive Bob Collymore recently told Parliament that recommendations of the report seek to punish the firm’s success:“The Analysys Mason Report … seeks to declare Safaricom dominant in certain market segments, proposes a number of remedies or interventions the import of which will punish Safaricom’s customers, stifle innovation, discourage investment and reward competitors who do not invest in their networks as they should,” he said.

Source: Business Daily