INTERNATIONAL - Telkom Kenya called on the industry regulator to ensure a level playing field, weeks after the company abandoned plans to combine operations with Airtel Africa’s domestic unit.
Halting the merger earlier this month ensured Safaricom’s position as the East African nation’s industry leader by ending prospects for a stronger rival and a de facto duopoly. Kenya’s anti-trust body had approved the deal with conditions, including a requirement for Telkom Kenya to give up spectrum it was issued once its license expired. A tribunal set aside some of the conditions.
“Dominance is an issue that must always be addressed in any market,” Telkom Kenya Managing Director Mugo Kibati said Wednesday at a meeting in the capital, Nairobi. Regulators should ensure “a landscape that is level,” he said.
The Communications Authority didn’t immediately respond to calls and a text message requesting comment.
New Structure
Telkom Kenya, 60 percent owned by Helios Investment Partners LLP and the rest by the government, is now restructuring its business into two units from three in pursuit of a different growth strategy. The consumer division’s focus will include data, financial services and partnerships, according to Mugo. The digital unit will advance the company’s plan to ramp up investment in services such as the internet of things, cloud, big data, analytics and hosting.
“The end game is to build and become the technology partner of choice,” Mugo said. No additional spectrum will be required to implement the new strategy.
Safaricom had about 65 percent market share of mobile subscriptions in Kenya as of March, according to data form the Communications Authority. Airtel Networks had 26.6 percent and Telkom Kenya 5.8 percent. Safaricom’s M-Pesa platform had almost 99 percent of mobile-phone based payments market share.
A competition study previously found that Safaricom was a dominant player and its recommendations included price controls. The company was also asked to allow rivals access its M-Pesa platform. Safaricom said then, competitors didn’t meaningfully challenge its growth because they weren’t investing as much.
Safaricom didn’t immediately respond to an emailed request for comment on Wednesday.
BLOOMBERG