Airtel Pegs Growth on Regulator Decision Declaring Safaricom Dominant Player

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Airtel Kenya Its Now
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Airtel hopes to ride on a decision by the Communication Authority of Kenya declaring Safaricom the dominant player to propel its growth. Airtel, which controls 22.6 per cent of the market, has been pushing to have Safaricom declared dominant.  Safaricom controls 67.4 per cent of Kenya’s telecoms market, followed by Airtel with 22.6 per cent market share while Orange has 10 per cent.

This was alluded to during the launch of a new campaign dubbed “Its Now” meant to bolster the company’s focus and strategy. The campaign also announced Manchester City midfielder and Ivory Coast captain Yaya Toure as Airtel’s new brand ambassador. In the notes of Bharti Airtel’s full year financial results, the company said of the Kenyan market “The Tariff and Competition Regulations are at a final stage and awaiting signature of the Cabinet Secretary. This Regulation will allow for reducing the dominance by any one operator, and promote a more competitive market”  The same has received the support of the Cabinet Secretary ICT Fred Matiang’i as well as Communication Authority but received opposition from the Competition Authority of Kenya, the body charged with the mandate of regulating and creating a fair field in all sectors of the economy.

Global best practices demand a review of an industry to determine if there are high barriers of entry, if the dominant position is expected to persist indefinitely  and whether the dominant player is abusing the power that comes with the position. The effecting of these regulations would require Safaricom to spin-off some of its business units such as M-pesa, a fact also affirmed by Airtel Kenya CEO, Adil El Yousseffi.

“The dominant player has a successful mobile money service, and have proven that it works. They should then open it up for other players”, he said. “This will not only create value for their shareholders, consumers as well as other players”, he added. Safaricom has allowed other players to use its vast M-pesa agency network. Other conditions likely to be imposed on Safaricom include vetting of any tariff reductions by the regulator prior to implementation as well as price controls. Safaricom has also denied abusing the position and adding that its current market share has been as a result of bringing to market innovative products.

Last week Airtel Africa CEO Christian De Faria said over the top content providers such as Facebook, Google and Whatsapp should be regulated and forced to pay a fee as they utilize infrastructure put in place by the mobile companies. Airtel is under increasing pressure to make money in the Kenyan market after failing to breakeven in this market despite hundreds of millions of dollars invested in the operations.

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