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New rules not targetting Safaricom, CAK says

20 August 2015, 21:47

Nairobi - Kenya's telecoms regulator said on Thursday that new regulations to prevent large firms abusing their dominant position in the sector are not targeted at Safaricom, the country's biggest operator, or any other company.

Amendments to the sector's competition law, due to come into effect any time, will give the regulator more powers to declare a firm to be dominant, a step that could lead to penalties.

However, the Director General of the Communications Authority of Kenya, Francis Wangusi, said the regulator did not aim to penalise any company just for being dominant, but only if there was abuse of its position in the market.

Wangusi said it could be up to 18 months before enough work had been done to determine if any player was dominant - defined as having more than a 50 percent share of a market segment.

He denied media reports that the regulations were targeted at Safaricom, which is 40 percent-owned by Britain's Vodafone.

"There are various markets and we would not want to identify ourselves with anybody who wants to say that we have chosen a certain player to be able to make rules around it," Wangusi told a news conference when asked if Safaricom was the target of the new rules.

Safaricom has 67 percent of Kenya's 23 million phone customers, and leads segments such as voice and phone-based financial services.

Its rivals, subsidiaries of India's Bharti Airtel and France' Orange, have complained its size gives it unfair advantages.

The regulator is hiring a consultant to do a study of the telecoms, postal and broadcast markets, Wangusi said.

"And that is why it is too early for us to come up to say 'Safaricom you are dominant', because Safaricom can be dominant in certain markets, but not dominant in others," he said.

Safaricom said last month that the new rules could discourage investment by targeting large players; prevent a dominant operator from freely setting prices of retail services; force it to share its network infrastructure at prescribed rates and could potentially lead to the break-up of such a company.

Wangusi said the new regulations would further break down the telecoms sectors into segments including mobile and fixed voice, data, text messaging and mobile money transfer services.

"In all these markets, we would not apply the same rules. If for example you have significant market power in retail services, you will not have the same rules regulating you like when you have it in wholesale," he said.

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- Reuters


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