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Safaricom fear new rules will hinder growth

07 July 2015, 21:44

Nairobi - Regulations proposed for the Kenyan communications industry threaten to deter investment by targeting large firms, said a senior executive of Safaricom, the biggest telecoms operator in the east African nation.

Information and Communication Technology Minister Fred Matiangi said last week he would present new regulations to parliament to prevent large firms abusing their dominant position, local newspapers reported. He did not name any firms or give details.

Steve Chege, Safaricom's director of corporate affairs, said the proposals would prevent a dominant operator freely setting prices of retail services, would force it to share network infrastructure at prescribed rates and could lead to a break-up.

"You prepare regulations to manage the market not to manage a player within the market," Chege told Reuters. "Essentially we are saying they are punishing success."

Safaricom, 40 percent owned by Britain's Vodafone and one of the most heavily traded stocks on the Nairobi bourse, has 67 percent of Kenya's 23 million phone customers, and leads segments such as voice and phone-based financial services.

Its rivals, units of Bharti Airtel and Orange, have complained its size gives it unfair advantages.

Chege said the new regulations would give the regulator more powers to declare a firm to be dominant, a step that could lead to penalties, while removing tests to show how such a declaration was reached.

"If they want people to invest, if they want certainty, they need to make sure some of the regulations that have been excluded from there are actually put back in," he said.

Safaricom wanted parliament to insert specific tests to determine if an operator was dominant, Chege said.

Parliament must first approve the new code before it is published in the official gazette and comes into force.

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- Reuters


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