Not to be the forbearing wife in an abusive relationship (they run through my bundles too fast😡)Obtaining a dominant position isn't unlawful where the dominant position has been achieved genuinely through hardwork, superiority of products and services and an interplay of supply and demand. What is unlawful (See Section 24 of the Competition Act) is abuse of the dominant position. Our debate on whether or not Safaricom has a dominant position is futile. What we should interrogate is whether 1. the dominant position (assuming indeed the numbers affirm their dominance) was achieved unlawfully and 2. there have been instances of abuse of such position such as product tying (as the writer claims) and restrictive agreements. If the answer to this is yes then by all means let's have a conversation on equitable remedy and please, make those fines hefty. Again, we casually talk about unfair competition but in which market? There is a need to define the markets that Safaricom (and M-Pesa) operate in and see real figures on market share in these markets.It is very tempting to approach this topic emotionally and I think that's the trap the trial judge in US v Microsoft fell in when he ordered that Microsoft be split to two. Well in that case there were instances of abuse, I digress. Legislative (see Midiwo's Bill) and regulatory efforts may sound like a good idea now but what happens when our home grown companies finally make it? Will we subject them to similar vilification? I get the angle on consumer protection but is it really the consumer we are protecting or are we just mad that one company made it while others still struggle? I'd like us to graduate the discussion to whether a lot of what Safaricom does amounts to abuse of dominant position. For example- the new product by PharmAccess, M-Tiba. You're telling me that for me to get services from one product (M-Tiba) I have to subscribe for another product (Safaricom). Am I the only one for whom this raises red flags?Tarehe Jumatano, Feb 22, 2017 saa 12:22 Twahir Hussein Kassim via kictanet <kictanet@lists.kictanet.or.ke> aliandika: Interesting debate…
I would agree with Ali on nurturing the ndogo-ndogos (read zukus, jamiis etc) that are upcoming. However I would rather let the bwana kubwa – Safcom be, the market has a way to trim bwana kubwa to size – Nokia is a good example.
From: Walubengo J via kictanet
Sent: Wednesday, February 22, 2017 11:29 AM
To: twahuq@gmail.com
Cc: Walubengo J
Subject: Re: [kictanet]Consumer protection a means of cutting Safaricom’s dominance
@Barrack,
Unlike columnist Jaindi, i dont have the benefit of the leaked dominance report. So unable to confidently take a position on the report.
However, I partly agree with Ali that the market has changed since the KPTC days (of the 1990s). Safaricom, just like Airtel and others may have been telecommunication companies then, but today they are more of ICT companies than they are traditional telcos (read voice providers).
The regulatory instruments and parameters for managing telcos in the 90s/early 2000s are therefore inadequate in dealing with todays dynamic ICT/Internet environment. There is need to have new regulatory instruments that can adequately interrogate todays ICT markets.
So once I get the dominance report, I would be keen to understand whether the Consultants recommendations are informed by a telco-focused regulatory instruments or are based on the new ICT realities. So in answering @Barrack, it is difficult to tell whether splitting Safcom is good or not, unless we understand what were the methodologies used to arrive at such decisions.
So I hope Racheal/CA will give us the detailed official report sooner, rather than later.
walu.
From: Ali Hussein via kictanet <kictanet@lists.kictanet.or.ke
>
To: jwalu@yahoo.com
Cc: Ali Hussein <ali@hussein.me.ke>; KICTAnet ICT Policy Discussions <kictanet@lists.kictanet.or.ke>
Sent: Wednesday, February 22, 2017 6:18 AM
Subject: Re: [kictanet] Consumer protection a means of cutting Safaricom’s dominance______________________________
Barrack
Im one of those old enough to remember. :-)
However my take is this:-
The markets have evolved so much and the dynamics of innovation, the market place and the consumer changed so much that the the Heavy Hand of Regulation must now be tampered by the light touch of nurturing and encouraging innovation and the market players to act and behave in a responsible manner. Failure to which the Market will deal with them in a most ruthless manner. The market won't break you up. It will decimate you and leave you for the dead. Just ask Telkom Kenya, Posta, Nokia and other once 'Dominant' global players.
I think we are focusing on the wrong things. By all means, keep a leash on the lean, mean fighting machine that is Safaricom. But also nurture home grown players -The PesaPals, the Cellulant, the WayaWayas, the Anganis, the Zuku's and Jamiis to ensure that we build such a deep bench of players that this Dominance conversation will be placed where it belongs - in the dustbins of history.
Ali Hussein
Principal
Hussein & Associates
"We are what we repeatedly do. Excellence, therefore, is not an act but a habit." ~ Aristotle
Sent from my iPad
On 22 Feb 2017, at 5:27 AM, Barrack Otieno <otieno.barrack@gmail.com> wrote:Hi colleagues,
I need an explanation like a two year old on this whole dominance
debate. Maybe Walu can help me here. Safaricom was a subsidiary of
Telkom Kenya focused on the mobile phone (GSM) Segment. Looking back
into the past and as a result of Liberization, the then giant Kenya
Posts and Telecommunications Corporation was split into , Telkom
Kenya, Communications Authority of Kenya (CCK then as the regulator
and Posta to handle the post office. We need to step back and
interrogate the real reasons as to why Progress of Telkom Kenya and
Posta has backfired in a maximum of ten bullet points. On the other
hand, we also need to figure out how Safaricom (a subsidiary of Telkom
Kenya which is now a public company bolted out of the stable and
became a success). My simple questions:
1. Will a split of Safaricom yield the desired effect?
2. Is it in the interest of Safaricom (the company or organization
that is a legally recognized person by the laws of the land to split
so as to suit the competition.
3. Can someone share case studies of where this has worked before?
Walu or anyone as old as Kenya Posts and Telecommunication Corporation
please help.
Following...
On 2/22/17, Ali Hussein via kictanet <kictanet@lists.kictanet.or.ke> wrote: @Mwendwa and all
it looks like that's what the consultant is suggesting.
Here are two other excerpts from the report that I find interesting:-
The most draconian of the prescriptions is the proposal to functionally
separate M-Pesa from Safaricom. This is tantamount to proposing a break-up
of Safaricom because in terms of growth revenues, M-Pesa is on track to
reach 50 per cent of the company’s net revenues. The consultants have also
proposed what they call “mandatory wallet-to wallet interoperability”, a
system where a consumer can keep cloud accounts across the platforms of
different mobile companies, making it possible to move and shift money
between accounts as one chooses.
I have said before and I'm happy to repeat this again. Separating M-Pesa
from Safaricom should not be forced on Safaricom. In my humble opinion
Safaricom should by now have done this voluntarily as a strategic imperative
to transform itself into the De-Facto National (Regional) Mobile Payment
System. I think the lost opportunity here can be seen by the KBA launching a
rival Mobile Platform called PesaLink.
The mandatory 'Wallet to Wallet' interoperability is an interesting angle
and needs to seriously be considered. This sort of compliments my point
above.
They have also recommended a system that they call “agent to agent
interoperability”, where agents will be able to support multiple mobile
money platforms using what is described in technical language as “a single
float”.
This is certainly interesting. In as much as this supports the notion of
'User or Customer Experience' I think the Regulator and the Telcos should
work towards ensuring this becomes a reality. In essence this could be a
solution to the allegations that Safaricom discourages its agent network
from dealing with rival Telcos.
Lastly, I would largely concur with Jaindi Ksero's conclusion (sort of) that
the Consultant has displayed a lack of knowledge in the functioning of our
national payments system. I would however like to add one for the road:-
Are our Regulators (CA, CAK and CBK) prepared to empower, grow and regulate
with a light touch the seemingly fluid Telco, Banking, Payments and Fintech
Spaces while ensuring that:-
a) They embrace innovation and new thinking while protecting National
Interests and consumers at the same time?
b) They work together without resorting to Turf Wars as evidenced in the
tiff between the CA and the CAK in 2015.
c) They consider creating a Joint Task Force to monitor, encourage and
empower players in the spaces mentioned to become Regional and Global
Players? I have often wondered aloud about the CBK's core mandate of
protecting Depositors' funds and wondered (again aloud) whether this mandate
is outdated and that it should be expanded to that of becoming an empowering
public entity that encourages research, innovation and entrepreneurship in
the burgeoning convergence of Banking, Telcos, Payments and Fintech Spaces.
d) Regulatory tools need to be rebooted and upgraded to reflect the times.
The current scenarios are such that one doesn't even know anymore which
industry one operates in.
This is a plea for the Regulation Mandates to drastically change and embrace
the now and the future.
Can the Future Czars step up?
Ali Hussein
Principal
Hussein & Associates
Twitter: @AliHKassim
Skype: abu-jomo
LinkedIn: http://ke.linkedin.com/in/alih
kassim
"We are what we repeatedly do. Excellence, therefore, is not an act but a
habit." ~ Aristotle
Sent from my iPad
On 21 Feb 2017, at 11:12 PM, Mwendwa Kivuva via kictanet
<kictanet@lists.kictanet.or.ke
> wrote:
So technically, we want to break up Safaricom so that these companies
can gain some traction "Airtel, has made cumulative debt to date of
Sh51 billion, according to latest audited accounts for the financial
year 2015. Indeed, in the league of loss makers, only Kenya Airways,
with their Sh54 billion lost in the most recent years, compares to
Airtel. As a matter of fact, the numbers in the company’s annual
accounts show that Airtel is insolvent and only surviving on life
support from the parent company in India. Safaricom’s only other
rival, Orange Telkom, has gone through exceedingly difficult trading
and financial conditions over the past decade. This a firm that is
technically insolvent. It has gone through several episodes of
restructuring that have not materially changed its circumstances."
______________________
Mwendwa Kivuva, Nairobi, Kenya
On 21 February 2017 at 23:48, Grace Githaiga via kictanet
<kictanet@lists.kictanet.or.ke
> wrote:
Jaindi Kisero gives us a glimpse of the competition study in the
telecommunication sub-sector undertaken by Ms Analysys Mason on behalf
of
CA. See full article:
"I recently came across a report by the consulting group Analysys Mason
entitled "A telecommunication competition market study in Kenya".
Readers
will recall that these consultants were retained by the market regulator
–
the Communications Authority of Kenya – to conduct a study whose results
were to inform the crafting of a new framework for regulating abuse of
market dominance by the big players.
As expected, one of the key findings of this study is that Safaricom’s
market share in both the mobile communications and mobile money segments
far
exceed the thresholds where firms are typically presumed to be
dominant."
Best regards
Githaiga, Grace
Co-Convenor
Kenya ICT Action Network (KICTANet)
Twitter:@ggithaiga
Tel: 254722701495
Skype: gracegithaiga
Alternate email: ggithaiga@hotmail.com
"Change only happens when ordinary people get involved, get engaged and
come
together to demand it. I am asking you to believe. Not in my ability to
bring about change – but in yours"---Barrack Obama.
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