Kenyan CA drops plan to break up Safaricom

The Communications Authority of Kenya (CA) has dropped a proposal to break Safaricom up into separate telecoms and financial services businesses on the grounds of its dominant size, Business Daily reported. Airtel Kenya, the second-biggest telecommunications provider after Safaricom, said the CA's failure to settle the dominance debate, and the watering down of the revised competition report, were hurting smaller operators. 

The CA has defended the report, saying it was revised after wide consultations and input by all industry stakeholders. The regulator had already said it would not break up any firm, after a huge outcry following the initial draft report, and was not immediately available for comment. The draft report that leaked to the media in February 2017 had recommended the designation of Safaricom as a dominant operator, which would have seen its voice and mobile money units split into stand-alone businesses that would compete with rival telecommunications firms. 

Safaricom rejects the claims of dominance and it has in the past accused the regulator of being preoccupied by helping its smaller rivals rather than focusing on consumers. CA data shows that at the end of September 2017, Safaricom had a market share by subscription of 71.9 per cent, after steadily rising in the past five years.