Telkom Kenya wants regulatory help to deal with Safaricom dominance

Telkom Kenya has called on the industry regulator to ensure a level playing field, weeks after the company abandoned plans to combine operations with Airtel Africa’s domestic unit.

Halting the merger earlier this month ensured Safaricom’s position as the East African nation’s industry leader by ending prospects for a stronger rival and a de facto duopoly. Kenya’s antitrust body had approved the deal with conditions, including a requirement for Telkom Kenya to give up spectrum it was issued once its licence expired. A tribunal set aside some of the conditions.

“Dominance is an issue that must always be addressed in any market,” Telkom Kenya MD Mugo Kibati said on Wednesday at a meeting in the capital, Nairobi. Regulators should ensure “a landscape that is level,” he said. Safaricom had about 65% market share of mobile subscriptions in Kenya as of March. Airtel Networks had 26.6% and Telkom Kenya 5.8% The Communications Authority didn’t immediately respond to calls and a text message requesting comment.

Telkom Kenya, 60% owned by Helios Investment Partners and the rest by the government, is now restructuring its business into two units from three in pursuit of a different growth strategy. The consumer division’s focus will include data, financial services and partnerships, according to Mugo. The digital unit will advance the company’s plan to ramp up investment in services such as the Internet of things, cloud, big data, analytics and hosting.

“The endgame is to build and become the technology partner of choice,” Mugo said. No additional spectrum will be required to implement the new strategy. M-Pesa dominates

Safaricom, which is controlled by South Africa’s Vodacom Group, had about 65% market share of mobile subscriptions in Kenya as of March, according to data form the Communications Authority. Airtel Networks had 26.6% and Telkom Kenya 5.8%. Safaricom’s M-Pesa platform had almost 99% of mobile phone-based payments market share.

A competition study previously found that Safaricom was a dominant player and its recommendations included price controls. The company was also asked to allow rivals access its M-Pesa platform. Safaricom said then, competitors didn’t meaningfully challenge its growth because they weren’t investing as much.

Safaricom didn’t immediately respond to an emailed request for comment on Wednesday. — Reported by David Herbling, (c) 2020 Bloomberg LP

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