Kenya - Safaricom complains the competition regulations are unfair and targetted at them

[kbc] Listed Telecoms Company Safaricom has expressed dissatisfaction over the Government's introduction of competition regulations allegedly designed to manage a single entity.

In a press statement signed by Safaricom Chief Executive Officer, Michael Joseph Monday, the company said that it was unfortunate that "the fair competition and equality of treatment regulations in particular are deliberately targeted at the market leader."

Mr. Joseph said that the rules themselves had material deviations from international best practice on competition management.

"This particular regulation seeks to punish the mere existence of a dominant player without compelling the Communications Commission of Kenya (CCK) to undertake a market evaluation of whether the dominant player has acted in an anti-competitive manner within its market segment," said he.

The Safaricom boss said such a move would result in the CCK punishing operators who are more successful and innovative than their competitors adding that the Global best practice on competition management provides that the regulatory focus should be regulating the act of abusing a dominant position as opposed to condemning the mere existence of a state of dominance.

The five regulations; Kenya Information and Communications (Dispute Resolution) Regulations 2010, Kenya Information and Communications (Tariff) Regulations 2010, Kenya Information and Communications (Compliance Monitoring, Inspections and Enforcement) Regulations 2010, Kenya Information and Communications (Interconnection and Provision of Fixed Links, Access and Facilities) Regulations 2010 and the Kenya Information and Communications ( Fair Competition and Equality of Treatment ) Regulations 2010 were gazetted by Information and Communications Minister Samuel Poghisio on March 30, this year.

Joseph said with the four vibrant mobile service providers all competing to win increased market share it was self-evident that the telecommunications market is the most competitive industry in the country.

"It therefore goes against the grain of overarching Government economic policy to now seek to introduce retail price controls for telecommunication services," he added.

Mr. Joseph urged the CCK to apply the new regulations to equalize the market akin by becoming a player in the market as opposed to a neutral referee.

"It is our view that the Government has a responsibility to ensure that its laws have equal application and are designed to facilitate growth of the economy by increasing investor confidence in the objectivity of our legal processes," he said.

He at the same time called on the government to urgently review these regulations in the interest of maintaining a fair and transparent competitive environment.

CCK also seeks to introduce price controls in which consumers will be able to retain their user numbers whenever they decide to change service providers.

Industry players see the move as a major victory for service providers such as Yu, Telkom Kenya's Orange and Zain, who have been pressing the regulator to shift the dynamics of competition by making it easier for consumers to move across networks.

Safaricom controls 78 per cent of Kenya's mobile telephone market.

Safaricom calls on CCK to review regulations