Safaricom faces fresh split push

Parliament during a past session. FILE PHOTO | NMG

By EDWIN MUTAI
More by this Author

Summary

• Debate on a Bill that seeks to compel Safaricom, Airtel and Telkom Kenya to split their telecommunications business from the mobile money transfer and lending units has started in Parliament.
• Gem MP Elisha Odhiambo initiated debate on the Second Reading of the Kenya Information and Communications (Amendment) Bill in the latest effort to break up telcos.
• The private members Bill poses the greatest threat to Safaricom, which dominates in the various business lines.

Debate on a Bill that seeks to compel Safaricom, Airtel and Telkom Kenya to split their telecommunications business from the mobile money transfer and lending units has started in Parliament.

Gem MP Elisha Odhiambo initiated debate on the Second Reading of the Kenya Information and Communications (Amendment) Bill in the latest effort to break up telcos.

The private members Bill poses the greatest threat to Safaricom, which dominates in the various business lines.

It seeks to address concerns that Safaricom has become too big through its dominant market share in voice, mobile data and mobile money.

Currently, Safaricom controls about 65 per cent market share in voice while its mobile money business has virtually no challenger.

The push to force Safaricom to be split has previously failed.

“Safaricom, which is one dormant telecommunications player operates mobile money under M-Pesa as well as mobile lending services Fuliza and M-Shwari,” Mr Odhiambo said while moving the debate.

“Mobile money services are not fully regulated like banks by the Central Bank of Kenya (CBK) hence susceptible to manipulation by service providers,” Mr Odhiambo said.

The Bill requires telecommunications firms to be licensed to only offer voice, data and SMS services while mobile money services will be licensed as banks.

In developed markets, anti-trust enforcement requires a conglomerate to sell some of its divisions or subsidiaries.

The Bill seeks to amend Section 25 of the Kenya Information and Communications Act to require any person operating a telecommunications service to “obtain the relevant licences from the respective regulators of any industry ventured into.”

The proposed law will also compel telco owners to provide separate accounts and reports in respect of all businesses carried out.