Safaricom gets reprieve as State seeks consultant

Integrated service provider, Safaricom has won temporary reprieve as the Government appears to have softened its stance on the regulation of dominant licensees in East Africa's largest ICT sector.

The telecommunications industry regulator, Communication Authority of Kenya (CA) Thursday stated that no player in the competitive telecommunications sector will be declared dominant for at least 18 months as the Government engages an independent consultant to conduct market analysis into the sector.

"The authority is going to engage an independent consultant to assess which player is dominant or not, across any of the many market segments in the sector, before any one player is declared dominant," said CA Chairman Ngene Gituku.

The market research set to be conducted by an international consultant once the tendering process is complete, and is expected to cost the tax payer approximately Sh30 million. The findings will be used to inform the enforcement of the Fair Competition and Equality of Treatment regulation.

Mr Gituku said the authority will develop a dominant market power report detailing the economic strengths of various licensees in various specific markets before any measure is introduced.

Safaricom has defended the perception that it a dominant player stating that it is not abusing its dominance and is competing on an international scale. "We do not deny the dominance tag because Safaricom has a 67 per cent market share," stated CEO Bob Colymore.

"It is the idea of punishing success that we are against because this will set a precedent as companies that hit a market share of more than 50 per cent in Kenya will be forced to share their investment or change their pricing," he said in a past interview.