Safaricom may cut investment if declared dominant

24 Feb 2015

Kenyan mobile market leader Safaricom says it may cut its USD400 million investment earmarked for this year if the Communications Authority of Kenya (CA) imposes penalties on the firm to restrict its dominance, Bloomberg quotes CEO Bob Collymore as saying. ‘If you start to slice the legs off this particular company, we’ll have to pull back on that type of investment,’ the executive said, adding: ‘We’re all up for going through the process, defining the areas that we may or may not be dominant in, defining what the abuse is, and defining what the remedies are.’ Safaricom, which is part-owned by the UK’s Vodafone Group, had a total of 21.850 million wireless customers at 30 September 2014, accounting for 66.7% of the market total, while its share of mobile voice traffic for the three-month period ended September 2014 was as high as 75.6%. According to a report by the Daily Nation earlier this month, Communications Secretary Fred Matiang commented: ’I wrote to the CA late last year to question why Safaricom had not been declared a dominant provider. Such a decision could lead to penalties for Safaricom such as an order to share its network with smaller competitors. ‘Something that I think should concern Kenyans is this apparent arbitrary declaration of dominance, and this apparent attempt to reduce the size of what is an African champion,’ Collymore said. ‘It is the prudent management of the company that brings the returns that we have been bringing back to our shareholders but also to help us to invest in this company. This year we will have spent KES36 billion [USD388 million].’ The executive revealed that Safaricom plans to have 250 4G sites in place across Nairobi and Mombasa by the end of March.

Kenya, Safaricom