CS Mucheru: We cannot punish Safaricom for being successful

 

ICT Cabinet Secretary Joe Mucheru when he appeared on KTN's Kivumbi 2022 show last month. [Stafford Ondego, Standard]

The government says splitting the business of market leader Safaricom is not a viable option in levelling the playing field in the telecommunications market.

Information, Communication and Technology Cabinet Secretary Joe Mucheru also said forcing the telco to share its infrastructure on account of its market share would be punishing success and investment.

“The market is very stratified, and most operators are dominant in their respective areas,” the CS told the Senate Standing Committee on Information and Technology yesterday.

“For example, Telkom has a dominant position in the landing areas for fibre optic cables in Mombasa, and this is something that operators have wanted,” added Mucheru.

The CS was responding to queries by the Senate Committee chaired by Baringo Senator Gideon Moi, which is taking views from industry stakeholders on the alleged abuse of Safaricom’s dominance in the telecommunications sector.

Airtel Kenya and Telkom Kenya have been pushing the regulator - Communications Authority of Kenya (CA) - to declare Safaricom a dominant player and have its business split, which would see its mobile money service M-Pesa become a separate company.

On Tuesday, Telkom Kenya chief executive Mugo Kibati told the lawmakers an official declaration of Safaricom as a dominant player would allow regulators to introduce policies that would level the playing field for smaller players. 

“In declaring Safaricom dominant, Safaricom should also be required to maintain full account separation for its mobile communication and its mobile services,” said Kibati.

“This is the law actually, and we as Telkom are currently in the process of separating our own T-Kash platform from the rest of Telkom mobile services as mandated by law,” he added.

Kibati accused CA of laxity and favouritism in setting spectrum fees as well as allowing Safaricom to hoard spectrum in the 900MHz band.

“We’ve always had a shortfall as Telkom in the 900 MHz band, which is one of the most important,” he said

According to CA data, Safaricom had 41.3 million subscribers as of June this year, compared to Airtel’s 17.3 million and Telkom Kenya’s four million subscribers.

Telkom Kenya and Airtel Kenya also want the ICT sector regulator to scrap mobile termination rates (MTR), the Sh0.99 that operators charge on calls originating from other networks. “At 99 cents today, we are literally working to pay Safaricom,” said Kibati.

Kibati said the regulator should adopt a bill-and-keep model, where each operator does their own billing and keeps their own revenues since the current model favours Safaricom, as it controls most of the subscriber traffic.

The regulator’s data further shows cross-network calls stood at 2.4 billion minutes in the three months ended June 2021, a 30 per cent drop compared to last year.

But CS Mucheru said the government cannot use the recommendations of the Analysys Mason study undertaken several years ago, as the sector has evolved. “The 2018 dominance study is outdated,” he said.