Safaricom dismisses market dominance claims

Safaricom Kenya has dismissed claims by the country’s telecoms regulator, the Communications Commission of Kenya (CCK) that it dominates the market and commands a higher market share than other operators.

Bob Collymore, Safaricom CEO (image source: file photo)

Reacting to a newspaper and website advertisement posted by the CCK on 9 August 2011, Safaricom CEO Bob Collymore issued an official statement:

“We wish to clarify that at this time Safaricom Limited has not been declared dominant and no regulatory interventions have been pronounced against us.

Generally, under the Kenya Information and Communications Act and the Regulations made there under, the CCK has powers to manage certain aspects of competition in the telecommunications industry,” said Collymore.

Collymore said that CCK is able to identify different market segments (typically based on products and services), examine the levels of competition in those market segments, make declarations of dominance, carry out tests to determine whether there has been abuse of dominance and in such cases implement proportionate and appropriate remedies.

“In doing this, the CCK must follow the provisions of the Act and the Regulations. It is in this regard that Safaricom and all other operators have been given up to 26 August 2011 to give submissions to this consultation.  We expect that CCK will carry out further consultations before any pronouncements are made,” said Collymore.

“It is our view that the recently enacted Competition Act and the newly created Competition Authority, which is the ultimate authority on competition issues in Kenya market, should be engaged in this process. The indication in the Consultation Paper that the CCK may regulate Safaricom’s retail mobile voice and SMS services is not an eventuality we believe will be implemented at the conclusion of this consultation process,” he said.

Collymore added that even if CCK makes a finding of dominance against Safaricom it must demonstrate that Safaricom has abused such dominance before it can make any remedial interventions.

“We believe Safaricom has attained its current market share based on fair competition on the back of innovation, investment in our brand and providing relevant services to our customers,” he said.

In any event, retail price controls is considered a drastic measure of last resort and the Kenyan government has been clear that it will avoid retail price controls in competitive markets, said Collymore.

Brian Adero