CCK hints that Safaricom, Telkom will be designated with holding SMP

18 Aug 2011

According to Business Daily Africa, telecoms watchdog the Communications Commission of Kenya (CCK) has signalled its intention to designate two of the country’s largest operators as having significant market power (SMP) in their respective market segments. Fixed line incumbent and sole national provider Telkom Kenya controlled all 380,748 of the country’s wireline connections at end-2010, whilst mobile operator Safaricom claimed a 73.8% share of the wireless sector at end March 2011, with around 17.2 million subscribers. If the CCK’s considerations are officially approved, the pair will be liable for more stringent oversight and heavier penalties for any breaches of the rules.

Matano Ndaro, director of competition, tariffs and market analysis at the CCK, indicated that the move is aimed at facilitating a more effective competitive environment, and improving the prospects of consumers. Ndaro commented: ‘What this means is that, as a regulator we will not impose penalties or obligations to entire services offered by the operators but to specific segments in which they have been declared dominant. We will for example be looking at how an operator has priced its off-net tariffs compared to tariffs within its network, and if we find that the charges are preventing its subscribers from calling other networks we shall enforce the obligation or penalties’.

If officially declared dominant, the two operators will also be required to file separate accounting statements for their subsidiaries, make public their network specifications and seek clearance from the CCK before introducing new services or products into the market. Nzioka Waita, Safaricom’s director of corporate affairs, described the plans as a ‘drastic measure of last resort’, whilst Telkom Kenya hit back at the CCK, arguing that the regulator is to blame for not licensing other fixed line players. Mickael Ghossein, CEO of Telkom Kenya, commented: ‘Dominance means you are dominating other players, which cannot be the case if you are the sole player in the retail fixed voice market segment’.

Kenya, Safaricom, Telkom Kenya