An M-Pesa agent serves a customer in Nairobi. Photo/FILE
By OKUTTAH MARK, mokuttah@ke.nationmedia.com
In Summary
- Airtel had petitioned the Competition Authority of Kenya (CAK) to compel Safaricom, Kenya’s biggest telco, to reduce the cost of sending money from M-Pesa to other networks.
- Airtel also sought the agency to compel Safaricom to open up its M-Pesa agency network.
- In the ruling CAK has directed Safaricom to open up its M-Pesa network, which however, comes weeks after the company announced that it had already allowed its agents to work for competing telcos.
The competition watchdog has declined to order a cut
on fees charged for making mobile phone money transfers across different
networks, handing Safaricom a crucial victory over its rival Airtel.
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Airtel had petitioned the Competition Authority of Kenya
(CAK) to compel Safaricom, Kenya’s biggest telco, to reduce the cost of
sending money from M-Pesa to other networks.
It argued that Safaricom’s pricing of its mobile
money services is anti-competitive because users of rival networks are
charged more than the telco’s subscribers.
Airtel also sought the agency to compel Safaricom
to open up its M-Pesa agency network. In the ruling CAK has directed
Safaricom to open up its M-Pesa network, which however, comes weeks
after the company announced that it had already allowed its agents to work for competing telcos.
The CAK board said that the ruling takes effect immediately.
“We did not make a ruling on the interoperability
and the cost of transactions because we found that this is an issue that
needs the input of both the Central Bank of Kenya and the
Communications Authority,” said CAK director-general Wang’ombe Kariuki
on telephone interview.
“This matter will also require the drafting of new laws.”
Although Safaricom had earlier said the opening up
of its 85,000-strong M-Pesa agents network to rivals was a commercial
decision that was not forced on it by any regulatory authority, Thursday
CAK said it had instructed Safaricom to do so in its ruling delivered
on July 12.
“We instructed Safaricom to end the exclusivity
agreement that it had with its M-Pesa agents meaning that now Safaricom
M-Pesa agents can transact business for any other mobile operator,” he
added.
Mr Wang’ombe said that the exclusivity agreement
was detrimental to the mobile money industry because it locked in some
agents to a single operator, an arrangement which in some areas led to
market dominance that CAK had sought to end.
With Safaricom controlling more than two-fifth of
the mobile money transfer business, other operators have claimed that
barriers such as exclusive agent deals and different pricing are an
abuse of its dominant position.
Safaricom has previously said that it is keen on
interoperability – full integration of mobile money services – and that
it was working with a global association for mobile operators to achieve
this.
There is currently no interoperability in Kenya’s
mobile money market, meaning that each company’s product is only
directly accessible to its customers.
Safaricom treats cash recipients in other networks
as “unregistered users” who can withdraw the money by presenting an SMS
credit notice to an M-Pesa agent.
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