[daily nation] A set of regulations published by the Minister for Information and Communications, Mr Samuel Poghisio, regulating the mobile sector in the telecommunications industry has kicked up a huge storm.
These regulations are meant to address the interaction between the four companies that provide mobile services in the country.
On one side is Safaricom which accounts for 80 per cent of mobile subscribers in the country and is opposed to certain aspects of the regulations.
On the other side are the YU, Zain and Telkom Kenya Orange who share between them the remaining 20 per cent of mobile subscribers.
As expected, the three dwarfs are cheering the minister, smiling with glee and hoping that the minister will floor the giant in Safaricom.
The fortunes of these four companies are, to a great extent, defined by the trajectory they have taken as business enterprises. This is more so when you compare Safaricom and Zain who are relatively in the same age group.
Safaricom has flourished purely as a result of the business decisions it makes and the role played by Michael Joseph as the CEO. On the other hand Zain has been changing colours instead of growing as a business.
In fact changing colours is the most defining feature of Zain during the past decade! A decade after both companies ventured into the mobile phone business, Safaricom has evolved into the most profitable company in Kenya. Zain, on the other hand, remains stuck in the mud.
Safaricon sees the regulations as an attempt to tie its hands to its back in a swimming contest supervised by the minister. The other companies see the regulations as a lifeline that will help revive their business.
Of course, the regulations are a piece of poor policy decisions that have the colour of law and make no sense whatsoever. They constitute what is referred to in law as trial by legislation.
More importantly, it comes out quite clear that the interest of the public users of mobile phones is not a consideration that was in the mind of the minister.
To the contrary, the regulations address the interaction or relationship between these four companies and are cleverly designed to stall the further development of Safaricom while at the same time ensuring that these three other companies claw into Safaricom's territory.
The regulation that is being introduced by the minister is an imprudent way of punishing a successful business enterprise while rewarding poor management.
This invention on the part of the minister is akin to the government passing legislation that targets Nakumatt in order to allow Uchumi and Tuskys supermarkets to catch up.
The minister published four sets of regulations, but the one that created the biggest storm is the Kenya Information and Communications (Fair Competition and Equality of Treatment) Regulations, 2010.
This regulation is ill-thought, poorly drafted and irrational. Importantly, it specifies sanctions against a licensee who acts in breach of fair competition or equality treatment.
This is really laughable for two important reasons.
First, what is the definition of fair competition and equality treatment? No where in the regulation are these controversially loaded terms defined. Isn't it utterly ridiculous for such weighty legal determinations to be left to civil service mandarins?
What constitutes fair competition in any enterprise, whether a commercial or political contest, is the most subjective determination.
Second, in a country where such determination can be procured at a price, isn't the minister inaugurating a market where bids will be received from the four competitors?
This comes out very clear in Regulation 13 which empowers the Communications Commission of Kenya to determine, on its own motion, factors that constitute fair competition and equal treatment.
The regulations published by the minister are subjectively designed to address one particular mobile company. The purpose is to urgently address needs of companies that are privately owned for the sole purpose of improving their profit margins.
There isn't even shallow pretence that the interest of ordinary Kenyans is at stake.
Of course throughout the world, the telecommunications sector is highly regulated in order to ensure that monopolistic tendencies that are harmful to the consumer are addressed.
These regulations address the issue of equal treatment and standing before the law. It is quite obvious that the regulations published by the minister legislate that the past strength of Safaricom constitutes an offence now and in the future.
Probably, the minister needs to read a number of far-reaching cases decided by the American Supreme Court that held that the kind of regulations he has published constitute punishment as they affect the bottom line of the targeted company and are thus not valid regulations.
Kenya: Consumers' Interests Ring Hollow in Phone Firms War
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