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Kenyan telcos seek protection from Safaricom

Kenyan telcos seek protection from Safaricom

As Safaricom PLC marks its 18th year of operation, market rivals are looking to the industry regulator to address the company's dominance and instil balance in the market.

According to the Communication Authority (CA) quarterly report for April to June 2018, Safaricom has 29.7 million mobile subscribers (representing 65.4% market share) and 23.9 million mobile money subscribers (representing 80.7% market share), as well as 69.5% of the mobile data space.

Competitors have reacted with concern.

Speaking at the recently concluded Connected Kenya 2018 summit in Nairobi, Telkom Kenya CEO Aldo Mareuse urged regulators to address the issue of Safaricom's dominance and to protect other operators to ensure a level playing field.

"There has to be a competitive market environment in the Kenyan telco sector. Today the sector suffers from an imbalance with one player dominating the industry, with no rules to establish a competitive market. There is urgent need for a competitive environment to encourage innovation and most importantly give the consumers more choice. If this is not addressed the industry will collapse."

Telkom Kenya is ranked third within the country's mobile industry with 3.9 million mobile subscriptions.

In August this year Safaricom responded to claims made in a CA report, conducted by Analysys Mason, that the company dominated certain services – and specifically to the recommendation it should be compelled to share infrastructure with other telcos to try and restore balance.

Safaricom defended itself saying that implementation of the report by the CA would be tantamount to 'punishing innovation.'

Despite the struggle with the regulator, Safaricom continues to gain market share in key segments including FTTH.

The company is now second to Wananchi Group in providing fixed internet services, having 78,104 subscribers (representing 21.2% market share). Wananchi Group has 112,155 subscribers (representing a 30% market share.)

In the last fiscal year, ending March 2018, mobile data was a strong revenue generator for the company, having increased 24 % (from KShs 29.33 billion to KShs 36.36 billion).

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