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By Steve Umidha
Airtel Kenya has hit out at the Communications Authority (CA) for its unwillingness to declare Safaricom a dominant provider, saying the regulator’s indecision over the matter has made it difficult for the company to commercially compete.
In a 15-page presentation to the Senate Committee on ICT hearing the case, the operator has also accused CA of intentionally subscribing favors to Safaricom in spectrum allocation, despite heavily investing on the network to improve customer experience.
While acknowledging there hasn’t been any existence of a dispute regarding the position of Safaricom in terms of its dominance status and significant market power, Airtel said there has however, been an obvious reluctance by the regulator in declaring its rival player dominant in retail mobile and retail mobile money markets respectively.
“Declaring Safaricom dominant is the first step to ensuring market competitiveness which we believe has been the sticking point and key barrier in taking any steps to rectify any market anomalies in Kenya,” argued Airtel.
Airtel Kenya is ranked the country’s second largest mobile operator by market share but has struggled to penetrate the Kenyan market on data and mobile money segments despite its massive infrastructure investments.
Safaricom dominates the two segments of the market even though its dominance on data has been shrinking over the last years with Jamii Telecommunication Ltd and Telkom Kenya among other players offering alternatives.
Smaller players including Airtel, have long maintained that Competition Authority of Kenya (CAK) and CA should split up Safaricom and M-Pesa into separate stand-alone business units in order to compete favorably and open the market.
But the regulators, according to Airtel Kenya, have failed to honor those requests but instead continue to extend special treatment to Safaricom case in point the allocation of additional spectrum to the operator while renouncing the same privileges to smaller players.
As a result, Airtel says that failure by CA to allocate it additional spectrum has negatively limited its efforts to improve the operator’s LTE/4G network to customers majority of whom continue to decry poor internet services.
“We are unable to get additional spectrum in the 1800MHz (Band 3) and 2100MHz (Band for 4G/LTE despite being highly in need of the same in order to provide enhanced accessibility of Airtel 4G services by all customers without device limitations related to spectrum bands,” it argues in its submission on Wednesday.
Uneven playing field conditions in telecom markets challenges the pace of investment in the Industry, according to the operator that has had its brand name modified at least five times in the last two decades.
In its defense, rather than pocketing the proceeds from its innovation, Safaricom has argued that it has ploughed back revenues to transform itself into the multi-billion firm it is today – with its diverse marketing strategies also seen to be paying off.
Previous attempts to address Safaricom’s monopolistic practices have desperately hit a snag.
Between 24 May 2016 and 12 May 2017, CA picked Analysys Mason to undertake a telecommunication competition market study. It took until February 20, 2018 for a stakeholders’ engagement and subsequent submission to happen.
But even then, according to the timelines given in the dissemination workshop, CA was to finalize, publish and implement the report by June 2018. No action has been taken thus far.
The study concluded Safaricom has Significant Market Power and is dominant based on market share of subscribers, volume and value confirmed by analysis of qualitative factors.
Safaricom holds 32.5 MHz more spectrum than Airtel and 45MHz more spectrum than Telkom.
“Despite investing heavily on the network to improve customer experience, we continue to grapple with lack of spectrum especially in 4G/LTE which as advised by the CA is unavailable, yet the dominant player holds excessive spectrum,” regretted Airtel.
In what is seen as a frantic stab to ‘level the playing field,’ Kenya Private Sector Alliance (KEPSA) Wednesday in its submission to the same Senate Committee instead called for another study to decide on the contentious matter.
“A baseline of data needs to be established as well as the impact of the market shares, before looking at intervention measures to alter the market balance,” said KEPSA.