[kictanet] Safaricom faces M-Pesa break up in market dominance war

Thu Feb 23 23:55:50 EAT 2017

Guys,
Competition Authority refused to be involved in matters between Safcom and the regulator.
Back in 2015, CAK, wrote to CA and and asked if Safcom had abused their position.
From DG of CA, to CS Matiang'i and the then PS Tiampati, no one was able to reply to that question.
Read below;
http://www.businessdailyafrica.com/Corporate-News/Reprieve-Safaricom-CAK-refutes-dominant-player-tag/539550-2650002-un4mtj/index.html

So if you look at the grand scheme of things splitting Safcom is going to be done so as to create room to expedite growth room for another player who I will NOT name now. But look very closely. I mean very closely ....

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________________________________
From: kictanet <kictanet-bounces+gwarigi=msn.com at lists.kictanet.or.ke> on behalf of Grace Githaiga via kictanet <kictanet at lists.kictanet.or.ke>
Sent: Thursday, February 23, 2017 5:01:44 PM
To: gwarigi at msn.com
Cc: Grace Githaiga
Subject: Re: [kictanet] Safaricom faces M-Pesa break up in market dominance war

The thing is that report is already 'leaked' or how else would Jaindi be chambuaring it for us. So it will be interesting to see the final report that is 'undergoing internal review'. And I guess we can interpret this 'reviewing' in different ways. But you also raise a good point. What were the TORs? Was Safaricom already declared dominant and therefore these specific recommendations? Did the Consultant draw these recommendations based on opinions from some quarters?

Look at this from the article:"The report has also recommended ‘replicability of retail tariffs’ meaning that whenever Safaricom is deciding a promotion or a loyalty scheme - for instance ‘Bonga points’ or ‘Storo’ - the regulator must check and ensure that the offer is being profitably replicated by a reasonably efficient competitor". Really? So Companies have no independence in deciding on their promotional products to attract more customers?

In addition,  I thought we have a Competition Authority that should deal with competition matters? Yes?

Wacha tungonjee hiyo ripoti after it has been 'reviewed'.

Best regards

Githaiga, Grace

On Thursday, 23-02-2017 at 16:21 Ali Hussein wrote:

GG and all

I'm really curious:-

1. 

This document seemedvery loaded. And it seems that it has gone beyond its mandate? Were theConsultants asked to provide recommendations to remedy a 'Dominant' position?it would be good if we could have seen the TOR for this assignment.

To quote the article:-

2. 

Safaricom chief executive Bob Collymore said he had not seenthereport, but bristled at the prospect of an external party ordering thecompany to break up its business.

“I am pretty hostile to the idea. Wecan’t have other people dictating whether we break up our company or not,” hesaid.

Absolutely. I can't blame him for that.

It also seems like the Regulator is Regulating Safaricom for thecompetition not for the consumer

 - if of course the leaked report is to be believed.

Then the leaked document talks about the possibility of splitting M-Pesa from Safaricom but stopping shot of making the split permanent - as in split them but let them remain under one legal entity. In commercial terms this is known as creating 'Chinese Walls'. We all know how that works.

IT NEVER WORKS!!

Besides which. Breaking up companies is simply a Regulatory tool fit for the AT&Ts, Standard Oils (which by the way is back as one huge conglomerate after being split into more than 50 companies) of this world.

3. This is the information age. The Networked Age, The Millenial Age. The core potential customers don't care about Nationality, colour, creed or whatever else. All they care about is What have you done for me lately? or better still - What can you do for me now?

Its clear Safaricom has earned its strips. Remedying market power abuse cannot be to split up the company. The idea that you punish a successful company by cutting it into pieces is preposterous in 2017.

4. CA, we would like to see the report before 'internal' review. We would like to see it before it is edited. This is the age of transparency. We would hope that the report we finally see as the community will look the same as the one Jaindi Kisero seems to be privy to.

Share the report already...

AliHussein

Principal

Hussein & Associates

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim

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Chiromo Road, Westlands,

Nairobi, Kenya.

Any information of a personal nature expressed in this email are purely mine and do not necessarily reflect the official positions of the organizations that I work with.

On Thu, Feb 23, 2017 at 1:32 PM, Grace Githaiga via kictanet <kictanet at lists.kictanet.or.ke> wrote:

As the draft Dominance report undergoes internal review at CA, Jaindi Kisero continues to provide some snapshots.

"Telecoms operator Safaricom could be forced to hive off its popular mobile money service M-Pesa if sector regulator, the CA, moves to implement recommendations of a market dominance report.

Separating the highly profitable mobile money service from Safaricom’s core telecoms business – commonly referred to as functional separation - is the gist of a raft of recommendations that international consultants
- Analysys Mason - have made in a yet-to be published reportseen by the Business Daily."

More details:http://www.nation.co.ke/business/Safaricom-faces-M-Pesa-break-up-in-market-dominance-war-/996-3824618-vdv5gw/index.html

Best regards

Githaiga, Grace

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