Politics and policy
By OKUTTAH MARK, mokuttah@ke.nationmedia.com
In Summary
- The proposed law empowers the Communications Authority of Kenya to automatically declare any telecommunication firm with a market share of more than 50 per cent as dominant.
- Safaricom says the proposed regulations will automatically declare it a dominant operator without any evidence showing that it is abusing its dominant position
Safaricom
has differed with the Communications Authority of Kenya (CA) on a
proposed set of rules aimed at curbing abuse of market dominance, saying
the regulator did not take on any of its suggestions at the public
consultation stage.
The proposed set of 14 rules, to be passed on to Parliament,
include a Fair Competition and Equality of Treatment clause that
empowers CA to automatically declare any telecommunication firm with a
market share of more than 50 per cent as dominant.
Safaricom on Thursday said the proposed regulations
will automatically declare it a dominant operator without any evidence
showing that it is abusing its dominant position, contrary to
international best practices.
“Safaricom has expressed its disappointment with CA
on the proposed regulations in particular on the Fair Competition and
Equality of Treatment and the Tariffs regulations,” said Safaricom
director of corporate affairs Stephen Chege in an interview.
Once declared dominant, Safaricom would operate in a more restricted business environment in terms of marketing and pricing.
The regulator will have powers to set prices for any firm declared dominant.
This, Mr Chege said, goes against the normal practice in a liberalised economy.
Any firm declared dominant will also be subjected
to at least a 45-day tariff approval process, while its rivals can
change their tariffs within a day’s notice.
The ICT secretary Fred Matiang’i on Thursday said the regulations will be forwarded to the National Assembly next week.
Under the proposed regulations, any operator found
to have abused its dominance or engaged in anti-competitive conduct will
be liable to a fine not exceeding the equivalent of 10 per cent of its
gross turnover in the preceding year, for each financial year that the
breach persists.
The CA deleted Section 3A of the Kenya Information
and Communication (Amendment) Bill 2013 that previously required the
regulator to establish if the operator was abusing a dominant status
before penalising it.
“With the new amendment on the tariff regulations,
it will take Safaricom at least two-and-a-half months to react to any
price adjustment by competitors, since we will be subject to a 45 days
approval process by the CA which includes publishing the rates in the
Kenya Gazette, compared to other operators that will only require a
day,” said Mr Chege.
The CA director-general Francis Wangusi separately
said that after the regulations are passed by Parliament, the regulator
will come up with data showing which operator is dominant in each market
segment before taking action.
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