Talks of splitting up Kenya and East Africa’s dominant telco, Safaricom, previously gathered interest about five years ago when the Kenyan parliament stepped up calls to break the all-conquering telco into two fragments.
This attempt sought to guard against monopoly in the Kenyan telecommunications space. But as time passed, the issue was swept under the carpet.
Once again, in 2017 , a UK-based consulting firm, Analysys Mason (AM) was contracted to carry out a consultation about the competition in the telecommunications market in Kenya. Analysys Mason’s leaked report made certain recommendations to the Kenyan government.
The recommendation advised the splitting of Safaricom. That is, the separation of Safaricom’s telecommunications business from its indomitable mobile money service, M-Pesa, which has a 99 percent market share. However, this recommendation was later abandoned, and once again, the matter was shelved.
It’s November 2020 and talks of dismantling Safaricom have come up once more. As with the two previous instances, there have been several back-and-forths on the matter. However, recent actions have opened up on the same subject, as the parliament in Kenya is currently pushing for a split between Safaricom’s telecommunications service and its domineering mobile money service, M-Pesa.
This would mean that the telco arm and the mobile money arm would operate separately. Hence, each would exist as a stand-alone venture and would have different regulators and overseers.
Lawmakers in Kenya have labeled Safaricom as a dominant market operator and have called for its separation from M-Pesa. This action is majorly an effort to check the ever-increasing dominance of Safaricom in the telecommunication space.
In the words of a Kenyan senator, Irungu Kang’ata, “In Kenya, you have a situation where one single player dictates how much you are going to pay for data bundles, for calls and Short Message Service because it controls almost 90 percent of the market”
The lawmakers’ target is to achieve a competitive atmosphere for other players in the industry to grow and thrive.
If this move pulls through, it means that Safaricom’s voice and data unit would now be under the regulation of the Communications Authority of Kenya (CAK) while M-Pesa would be under the control of the Central Bank of Kenya (CBK), just like fintechs.
Not only does Safaricom have the largest market share in Kenya (both telecoms and mobile money), but it also has the best telecom infrastructure.This forces even its competitors, Telkom Kenya and Airtel Kenya, to host their networks using Safaricom’s masts […]