Politics and policy
Safaricom chief executive Bob Collymore. Photo/FILE
By OKUTTAH MARK, mokuttah@ke.nationmedia.com
- Communications Authority of Kenya (CAK) on Friday set 13 conditions that Safaricom, Airtel and yuMobile must meet to complete the planned takeover of assets – key among them the opening up Safaricom’s M-Pesa agency network to rival operators.
- Safaricom must choose between opening up M-Pesa to rivals and yuMobile frequencies.
- The firm has previously opposed such a move, arguing that building the network has taken it years of hard work and billions of shillings thus making it hard to take its rivals on board for a free ride
Safaricom
chief executive Bob Collymore is facing hard options, following last
Friday’s approval of his company’s quest to acquire rival yuMobile’s
assets under tough conditions.
Mr Collymore has to carefully weigh the possible
impact of some of the set conditions on Safaricom’s business against any
advantages the firm may derive from taking over yuMobile’s assets.
Telecoms sector regulator the Communications
Authority of Kenya (CAK) on Friday set 13 conditions that Safaricom,
Airtel and Essar’s yuMobile must meet to complete the planned takeover
of assets – key among them the opening up Safaricom’s M-Pesa agency
network to rival operators.
Francis Wangusi, the CAK director-general, told a
Press conference that approval of the deal now depends on “Safaricom and
Airtel submitting to the authority, for approval, a framework for
sharing agent outlets for various mobile consumer services including
money transfer services and SIM registration centres.”
“Approval of the buyout now depends on the three
operators. Unless these conditions are met we are not going to approve
the transaction and the faster they respond to the conditions the
quicker we will conclude the matter,” he said.
Safaricom has previously opposed such a move,
arguing that building the network has taken it years of hard work and
billions of shillings thus making it hard to take its rivals on board
for a free ride.
“We invest in excess of Sh1.2 billion annually in
building and maintaining the M-Pesa agency network to serve our
customers better,” said Nzioka Waita, Safaricom’s director for corporate
affairs, adding that by growing the agency network, Safaricom has
demonstrated that there is ample opportunity for its rivals to recruit
and invest in their own agents as a show of their commitment to creating
jobs for young Kenyans.
Safaricom’s ring-fencing of the M-Pesa agency
network from penetration by rivals has been so intense and effective
that some of the telecoms operators have sought legal and regulatory
action on the matter.
Second-placed telecoms operator Airtel has, for
instance, filed a complaint with the Competition Authority seeking to
compel Safaricom to allow its agents to offer Airtel money services
alongside M-Pesa – by far Kenya’s most successful mobile money service.
The regulator’s decision to tie Safaricom’s buying
of yuMobile assets to the opening up of the M-Pesa network to rivals
means Mr Collymore must weigh the value of the assets that are up for
sale against what his company gets from exclusive control of the M-Pesa
network.
Successive studies have shown that besides
remaining as one of Safaricom’s fastest growing business lines, M-Pesa
has been an invaluable asset to Safaricom when it comes to retention of
customers, especially more recently as the market allowed easy migration
of subscribers with number portability.
Most of Safaricom’s subscribers have found it
difficult to change service providers mainly because of the
inconvenience they would suffer accessing mobile money in a market that
is more than 70 per cent controlled by M-Pesa.
Agreeing to acquire the yuMobile assets in
exchange for opening up the M-Pesa network would also amount to handing
rival Airtel an easy victory in a battle the two operators have fought
for years without a settlement.
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