Communications Authority of Kenya (CA) Explains the Competition Clause in Telecommunications

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Ngene B Gituku
Mr. Ngene B. Gituku; Chairman, Board of Directors at Communications Authority
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In a press statement released on 14th March, the Chairman of Board Directors of CA, Mr. Ngene B. Gituku shed some light on hot topics that have been circulating concerning the split of businesses that are too powerful to compete with others.

“It should be noted that CA is mandated by the law to develop, promote and monitor fair completion among key market players in the ICT industry. Together with the Competition Authority of Kenya (CAK), the CA’s responsibility of monitoring competition is motivated by the need to protect ICT users from unfair business practice,” said Mr. Ngene.

He added that based on the intricacy of managing the ICT sector, CA contracted M/S Analysys Mason in May 2016 to investigate the level of competition and its efficiency for players in the telecommunications sector. The investigation concentrated on pinpointing relevant markets in the telecommunications sub-sector, the number of players available and their overall market share.

In addition, M/S Analysys dived into establishing the degree and extent of competition among various telecommunications market and identifying those who command greater power. Another objective was to determine the market barriers and the proposal of remedies to mitigate those that hinder growth, among other targets.

The British firm concluded its studies and submitted its draft report to CA on February 2017, and has been consulting with CAK in accordance with the ICT sector law. Some of us must have caught wind of the preliminary report, and CAK is aware of concerns and comments that it started to receive from 6th March as part of the process to finalize the report, which should be out by May.

“…CA wishes to dismiss rumours that it has plans to split or perform actions … detrimental to dominant market players.”

It is crucial to remember that CA has not made public any competition data or information as gathered by M/S Analysys. By the same token, CA wishes to dismiss rumours that it has plans to split or perform actions that may be detrimental to dominant market players. These decisions are made according to the law upon the completion of Fair Competition, Tariff Regulations and Equality Treatment analysis.

Another notable point made by Mr. Ngene is that CA work ethics trump over claims that it is out to punish successful telecommunications businesses rather than enhance competition. The Authority has been accorded constitutional rights to ensure that market dominance does not result in abuse. Failure to exercise such measures may lead to anti-competitive concerns that may end up being catastrophic for investments, growth and consumer welfare. It is this kind of anti-competitive behaviour that cumulatively compromises quality or leads to high charges for services.

On the other hand, growth in the ICT sector, as well as the promotion of customer welfare, is fostered by the competitive nature of the telecommunications industry. Equally, it spurs social and economic development through innovation and similar activities.

To sum it up, these are the merits the CA expects to lay a solid foundation on, not to mention that it pegs its commitment to ensuring that stakeholders are well represented as a stepping stone to giving them a playing ground for fair competition that gives rise to new ideas, which are geared to make a positive impact on the economy and the people.

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