The Kenyan government has proposed a new Bill that would raise the threshold for telecoms firms to be declared dominant, with the aim of strengthening its focus on big tech companies. Under the proposed legislation, the threshold would be raised from 25% of the relevant gross market to more than half of the gross turnover of the entire market.
The move comes amid allegations that the country’s leading telecoms firm, Safaricom, has been pushing its rivals out of business. Safaricom currently commands 66% of SIM card subscriptions and 96.8% of mobile money, while Airtel follows with 26.3% and 3.1% respectively.
Safaricom maintains that its success should not be punished and that it does not hinder competition. However, its rivals have called for the government to declare the firm a dominant telecoms operator to ensure that competitors are not pushed out of business.
The proposed law puts heavy operational obligations on any operator who has been declared dominant, and imposes punitive penalties for abuse of dominance. Previous regulations required that the operator who had been declared dominant must get its tariffs approved by the communications regulator before they were launched in the market. This meant that a dominant operator was no longer able to adjust its tariffs upwards or downwards without getting the regulator’s approval.
The proposed legislation would drop this requirement, but would impose other stringent operating conditions on a telco declared a “dominant player” by the regulator. For example, dominant players would be forced to share their capital-intensive infrastructure such as transmission masts, and would be required to provide interconnection facilities to other telecommunications licensees with the same quality as they provide for their own services.
Airtel has argued that declaring Safaricom a dominant player is the first step to addressing the perceived uneven operating environment. The second-largest telco has in the past blamed the regulator for what it considers the skewed allocation of mobile spectrum in favour of Safaricom and the failure to reduce the fees that mobile phone operators charge each other for interconnecting calls.
Kenya’s telecommunications industry is currently regulated by the Kenya Information and Communications Act, 1998, which has had minor changes despite major changes such as the rollout of mobile money and home internet. The proposed new Bill is seen as an attempt to modernise the regulatory framework and address concerns about the dominance of big tech companies in the sector.