Business Daily (Nairobi)
Alex Gakuru
12 November 2007
analysis
Consumers are stuck without the option to switch to a different operator while keeping their mobile phone number and are hesitant to change to avoid losing important future calls in the persistent status quo. This is at odds with the law commanding the Communications Commission of Kenya to ensure consumers are protected offering a raft of implementation avenues.
But when CCK gives up implementation of number portability citing complexity, high costs, duopolists' disinterest, and no licence applicants for the service category, the issue escalates to bursting limits considering the prevailing high communication tariffs that hurt businesses but the service providers.
Given this scenario, perhaps it would be misplaced to assume tariffs are "affordable" when consumer choice is restricted and constricted.
Without competition, there is no incentive to lower prices, to promote investment in infrastructure, or to introduce innovative services, not just for the dominant company, but also for competitors.
Incumbents insulate themselves from competition by making it impossible for alternative telecommunications services suppliers to enter the market on a commercially-viable basis.
This conduct harms consumers, businesses and the economy as a whole. And because communications, like other industries such as energy and transport, is one of the main arteries of the market, if constricted, the whole body of the Kenya economy suffers.
The economy functions when people engage in production, distribution, exchange, and consumption of goods and services. These are inseparable from technological evolution, social organisation, geography and ecology, among other factors.
Telecommunications, banking news and information, and shopping become bigger businesses than, for example, extraction, production of raw materials and processing of raw or intermediate materials into goods.
Dominant market players weaken competition and harm consumers. They charge far more for voice calls, Internet access and data services and blocking entry of new and innovative third parties' offerings.
Oligopolistic tendencies where, for example, four big firms control ahuge percentage of the market ends up with a vulnerable user of services. This exposes the customer to price fixing, and may get worse to a market dominated by one player. Threats to the economic well-being of citizens and businesses are very close to home necessitating this look at the ICT regulatory regime.
Anti-competitive practices by mobile companies include issuance of "special" locked phones whose handsets cannot accept SIM cards from rival networks.
In such cases, consumers are forced to acquire extra handsets as opposed to just replacing the SIM card to enjoy better tariffs from different networks at different times of the day. Vendor lock-in is rampant in the computer and electronics industries where compatibility or inter-operability is not allowed.
Failure to implement portability encourages consumer "lock-ins". Vendor lock-in ties a customer to a particular vendor for certain products and services.
Regulator allocates chunks or "blocks" of mobile phone numbers to providers charging them about Sh66 million (or US$ 1 million) per block.
According to CCK web site, Safaricom has taken up 0720 to 0728 while Celtel has been allocated 0733 to 0736 number blocks so far.
Introduced as a tool to promote competition in the heavily monopolised wireline telecommunications industry, "Number portability" is a feature that enables telecommunication networks to provide users with the ability to migrate from one service provider to another without changing their telephone number.
But considering that this is a standard feature of the entire US telecommunications infrastructure (both fixed and wireless), perhaps it may not be accurate to say that "it has not been so successful where it has been tried."
Much-needed flexibility to move from one network to another based on the quality, price and variety of services offered is provided through number portability or "Fair Play" may now have to wait indefinitely or certainly no earlier than in the next three years depending on when the regulator decides to pursue the matter.
Essentially, regulators exist to guarantee baskets of choice are put on offer by competing providers. It is the responsibility of the regulator to ensure a consumer continues to enjoy a flow of communication even after the consumer changes subscription to their preferred service provider.
Telecommunications experts question why CCK created a new NumberPortability license category when elsewhere this it is enforced as a consumer protection licensing condition operators must fulfil.
The regulator environment in the so called "emerging markets" is at odds with trends in developed economies perhaps because European regulators, demonstrate little tolerance for dominant market positions abuses.
Neelie Kroes, European Commissioner for Competition Policy handed down Sh14.5 billion fine to Spanish Telefónica for "impeding competition on the Spanish broadband Internet access market for more than five years, and so depriving consumers and business of a choice of broadband suppliers," says a Brussels press release dated July 4, 2007.
Americans say the post office forwards letters when a person moves and telephone companies should be required to forward calls and Internet services providers to forward e-mails to customers who switch providers.
The Kenya Communications Act of 1998 specifically requires CCK to ensure that communications services are provided throughout Kenya and that the interests of all users of these services are protected with respect to prices for the services.
Number portability is a fundamental consumer protection responsibility demanded of the Commission whose continued postponement negates the intention of the law and thus should be implemented without delays.
Gakuru is the chairman, ICT Consumers Association of Kenya
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