28 June 2014

Kenya: Reviewed Telecommunication Laws to Hit Safaricom Hard

SAFARICOM's market dominance and infrastructural muscle will suffer once a new draft policy document that has been proposed by the sector regulator is made law before the year ends.

According to the Communication Authority of Kenya, the telco will be forced to allow mobile virtual network operators to ride on its network infrastructure.

The authority said most of the prominent provisions in the amended Kenya Information and Communication Act 2013 include sharing of core infrastructure in the telecommunication sector in order to improve service delivery and to help new entrants to gain footing in the highly competitive market.

"The new law has empowered the authority to promulgate regulations that will facilitate and enhance co-location of infrastructure. The provision means that operators who have refused to open up their infrastructure for the MVNOs will be mandated to do so once the policy is enacted into law," CA principal legal officer, Mercy Wanjau said.

The authority has also reviewed the threshold of determining the dominant telecommunication service providers in order to enhance fair competition in the market. "On determination of dominant operators, competition threshold has been amended from 25 per cent of the entire telecommunication market to 50 per cent of the relevant gross market segment," she said.

Safaricom has been under pressure from the authority to open up its infrastructure to other players. In April, CA made it a condition that Safaricom open up its infrastructure including the mobile money transfer platform-M-Pesa and agent network, in order to get approval to acquire the assets of Essar Telecom's yuMobile.

Last month, however, Safaricom ruled out allowing MVNOs to use its infrastructure citing the need to improve its network service.

Wanjau noted that infrastructure sharing has been happening on goodwill among the sector players, saying that new and existing operators will be required to share the existing infrastructure if it is technically possible.

"We are encouraging new entrants to find ways of riding into existing infrastructure like the MVNOs have done because of the cost advantage that arises with increased output of co-location," she said Friday during the media forum held at CA headquarters in Nairobi.

She said the new law will be presented for stakeholders discussion and negotiation adding that it will enhance operational efficiencies, revenue maximization, reduce capital investment, boost investment and reduce the cost of doing business in the telecommunication sector.

Copyright © 2014 The Star. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.