Popular mobile money transfer platform M-Pesa may soon become cheaper for non-Safaricom users if new proposals by a consultant hired by the Communications Authority of Kenya are effected.
Analysys Mason, a UK consultant appointed two years ago to assess competition in the telecoms sector, also recommends that Safaricom stops on-net discounts and individually tailored loyalty schemes so as to reduce the barriers to entry for smaller players.
COMPETITION
The consultant has however shelved a contentious proposal to split Safaricom and M-Pesa in order to reduce Safaricom’s competitive advantage in the mobile money transfer market.
Analysys Mason said Tuesday it had reviewed its earlier position that the two businesses be separated by the end of last year after consultations with stakeholders.
“This remedy could be seen as disproportionate and constraining the CA’s discretion to act as it saw fit at the time. Final report is therefore silent on what further remedies the CA might consider,” the firm said in Nairobi during presentations of the Telecommunication Competition Market Study in Kenya to the public.
Under the new guidelines, Safaricom will also be required to share its infrastructure with other networks to improve accessibility in seven of the most rural counties for 5 years, ensuring that other players are able to penetrate the remote areas where currently Safaricom is the sole available mobile provider.
“The original tower sharing proposal covered 14 counties and has now been reduced to 7 northern counties based on principle of proportionality and in recognition of investment made by Safaricom in rural infrastructure,” said the report.
DOMINANCE
The seven counties targeted for infrastructure sharing are Isiolo, Garissa, Mandera, Marsabit, Samburu, Turkana and Wajir
The proposals, which are currently under discussion by industry stakeholders at a Nairobi hotel could change the landscape in the telecom industry which Safaricom has dominated since its entry into the market.
If adopted, the recommendations could breathe life into smaller operators whose survival and growth have been hindered by Safaricom’s dominance in the industry.