State moves to rein in wayward telcos with new competition rules

ICT and the Digital Economy Cabinet Secretary William Kabogo takes oath of office during the swearing ceremony at State House, Nairobi. President William Ruto said that Cabinet Secretaries Mutahi Kagwe, Hon. William Kabogo Gitau and Lee Kinyanjui bring to the Cabinet the stamina and wealth of experience in public service that will accelerate service delivery to the people of Kenya.[FILE/Standard] The government has introduced a new tough set of competition rules that promise to reshape the country's telecommunications landscape. They aim to break down long-entrenched market advantages and give consumers more choices and fairer prices, according to officials. The Kenya Information and Communications (Fair Competition and Equal Treatment) Regulations, 2025, which came into force this week, backed by ICT Cabinet Secretary William Kabogo, represent the most significant regulatory overhaul in the sector in more than two decades. The new stringent rules come amid growing concerns over market concentration and anti-competitive behaviour in an industry dominated by a few powerful players. While the new framework does not name any company, the rules say they will address the influence of some of the largest mobile network operators and internet firms, which hold a commanding share of the voice, data and mobile money markets. All other major and small operators, as well as internet service providers, will also be subject to the updated rules reviewed by The Standard. "The purpose of these Regulations is to promote consumer markets which offer choice, quality and affordability," the document signed by CS Kabogo states, signalling a clear intent to rebalance the sector in favour of Kenyan subscribers and new entrants. Among the practices now under scrutiny are predatory pricing, exclusive contracts that lock in customers, refusal to share essential infrastructure and discriminatory treatment of competitors. Predatory pricing refers to a situation where a dominant operator temporarily prices services below cost to push out rivals, before raising prices again. Exclusive contracts point to agreements that lock customers into using only one provider, making it difficult or costly to switch. Other practices targeted by the new rules include the refusal to share infrastructure, such as fibre cables or mobile masts, preventing competitors from expanding coverage or improving service quality. Meanwhile, discriminatory treatment refers to a scheme where operators offer better terms, prices, or service quality to some users or regions while denying others the same conditions. The new rules, the government says, aim to prevent such practices, fostering a more competitive market that benefits consumers through better prices, wider choices, and improved service quality. Central to the framework is the ability of the Communications Authority of Kenya (CA) to designate operators as "dominant" in specific market segments - such as mobile money, broadband or wholesale data - if they control more than 50 per cent of that segment. Once labelled as dominant, companies will face strict obligations. For instance, they will be forced to share infrastructure like fibre optic networks and transmission towers with rivals under fair terms. Similarly, they cannot abuse their pricing power by setting "excessively high prices" or engaging in below-cost pricing to push out competitors. They also must keep separate accounting records for different services to improve transparency and prevent cross-subsidisation. They are equally barred from imposing exclusive agreements that prevent customers or partners from working with competitors. Companies found violating the rules face serious penalties, including substantial fines, mandatory changes to business practices and, in extreme cases, the forced sale of business units or even revocation of their license. For ordinary Kenyans, CS Kabogo reckons the changes could translate into tangible improvements, including lower prices for mobile airtime, data bundles and financial transactions. Consumers will also benefit from better network quality and broader coverage as smaller operators gain access to critical infrastructure. At the same time, there will be easier switching between providers without restrictive lock-in periods or exit fees. More innovation in services like mobile banking, agriculture technology and entertainment is also expected as competition intensifies. But the government walks a fine line: telcos and internet firms remain some of Kenya's most profitable companies and largest taxpayers, and their services are deeply embedded in the daily lives of millions. Overly aggressive intervention could unsettle investors or disrupt services, analysts warn. Yet the government says there is also broad recognition that healthy competition is essential for long-term growth. The Communications Authority will now begin the complex process of defining relevant market segments and assessing dominance - a task that will require deep economic and technical analysis. "This is a defining moment," said Ian Njoroge, a Nairobi-based analyst. "It's not just about rules - it's about whether Kenya can build a digital economy that is both innovative and inclusive."

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