Airtel has accused Safaricom of abusing its market dominance and stifling its competitors.
The competition between Safaricom and Airtel has been a long-standing one but every now and again Airtel complains that the Competition Authority of Kenya favours Safaricom. There’s no denying that Safaricom has almost faced no threat or competition over the years, but is that because they are continuously bettering their product or is it because they’ve been abusing its market dominance?
Safaricom’s CEO Peter Ndegwa defended Safaricom before the Senate Standing Committee on Information and Technology and denied the claims that Safaricom was stifling competition.
Mr Ndegwa stated that there’s already competition in the industry and that there’s enough room for any competitor to increase their market share through investments and innovation.
Ndegwa said:
“Safaricom does not have any market power and therefore Safaricom cannot act independently of other players and consumers. It is our position that there should be no adverse regulatory actions that would stifle the growth of the industry. There is room for a great investment in the industry and we look forward to seeing additional investment by other players into the market,”
So what does Airtel want Safaricom to do?
Currently, Safaricom should be declared as a dominant player in the telecom industry as they hold 64% market share according to data made available by the Communication Authority of Kenya.
Due to this data, Airtel referenced Kenya’s competition act which stipulates that a company that has more than 50% of the market share are the dominant player. Airtel’s woes are due to the fact that Safaricom’s market shares are double the size of Airtel’s.
Airtel’s defence.
Other countries such as Burkina Faso and Congo have declared Airtel as dominant for having market shares of 39.24% and 38.36% respectively. Nigeria also declared MTN dominant for its 44% market share although in Kenya Safaricom is still denying that they are the dominant company even if it’s rather obvious that they are.
If Safaricom admits that they are the dominant player then it would also mean that the accusations against the Competition Authority of Kenya have been biased and have been favouring Safaricom.