Wednesday, 21 October 2015

Safaricom controls 90 per cent of industry earnings amid complaints by rivals over dominance



Safaricom dominates the Kenyan mobile market, sweeping up more than 90 per cent of revenues in areas such as voice calls and text messaging, according to regulator data that could further fuel a debate about competition in the industry.

Rivals like Airtel and some officials have complained that Safaricom's dominance stifles competition. France's Orange is seeking to sell its Kenya operation, becoming the second international operator to quit the country after India's Essar Telecoms sold its yuMobile business in 2014. 

Safaricom, in which Britain's Vodafone has a 40-per cent stake, has dismissed accusations it hampers competition, saying it does not abuse its dominance.

Safaricom's revenues from calls amounted to a 91.63 per cent market share in 2014, while its closest competitor, Airtel, had 8.33 per cent, according to the data obtained from the Communications Authority of Kenya (CA).

In text or short messaging services, Safaricom had more than a 90 per cent share of total market revenues from that segment, the regulator said.

In mobile data, or internet services, Safaricom's revenues were 85.50 percent of the market share in 2014, while Airtel had 14.43 percent, Orange had 0.01 percent and Equitel, operated by Equity Bank's subsidiary Finserve, 0.06 percent.

The figures for Orange are for 2013 as it had not submitted audited accounts for 2014 to the regulator, CA said.

CA said in August that it was amending the telecom sector's competition law, but said it was not targeting Safaricom or any other company. It did not aim to penalise any company just for being dominant, but only if there was abuse of its position in the market.  

The regulator's head, Francis Wangusi, said at the time the new regulations would break down the telecoms sectors into segments including mobile and fixed voice, data, text messaging and mobile money transfer services. 

Airtel Kenya CEO Adil El Youssefi said the current market situation was limiting innovation and consumer choice and driving operators out of the country. "The sector is unable to attract new or incremental investments from other international players," said Adil.


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