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

Mon Mar 6 06:13:39 EAT 2017

Preach Grace. PP is becoming a sham. Making their decision public only at
the end of the process satisfies our Article 35 rights, albeit halfway. I
would have thought part of that process is hearing the views of both the
learned and unlearned.

Tarehe Jumatatu, Mac 6, 2017 saa 05:49 Grace B via kictanet <
kictanet at lists.kictanet.or.ke> aliandika:

> As we struggle to understand what public participation means.....
> The schedule of events is interesting Rachel, and it perhaps explains why
> there is already public discussion of a yet to be concluded report. It may
> be the public's way of reminding the regulator that we are also affected by
> competition decisions and discussions on this are not only a matter between
> regulators and licensees.
> When different stakeholders will give their input at different
> times.....does that mean that different stakeholder views are weighted
> differently? Would for instance, input by the public at public release
> stage still count even if the regulators and licensees have previously
> agreed on some aspects?
>
>
>
> 2017-03-06 3:54 GMT+03:00 Ali Hussein via kictanet <
> kictanet at lists.kictanet.or.ke>:
>
> Thanks Rachel.
>
> *Ali Hussein*
> *Principal*
> *Hussein & Associates*
> +254 0713 601113 <+254%20713%20601113>
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: http://ke.linkedin.com/in/alihkassim
>
> "We are what we repeatedly do. Excellence, therefore, is not an act but a
> habit."  ~ Aristotle
>
>
> Sent from my iPad
>
> On 4 Mar 2017, at 10:27 PM, Alwala, Rachel <Alwala at ca.go.ke> wrote:
>
> Hi Ali,
>
> Karibu. CA’s has always and will always operate within its legal mandate.
> The Competition Study draft report is under review.  This process will be
> completed in mid April considering we have to work hand in hand  with the
> Competition Authority of Kenya (CAK) and Licensees then later publicly
> release it in May.  There is a due process so please be assured you will
> have a chance to interact with it.
>
> Regards,
>
> Rachel
>
> From: Ali Hussein <ali at hussein.me.ke>
> Date: Friday, March 3, 2017 at 5:05 PM
> To: KICTAnet Discussions <kictanet at lists.kictanet.or.ke>
> Cc: Rachel <alwala at ca.go.ke>
> Subject: Re: [kictanet] Safaricom faces M-Pesa break up in market
> dominance war
>
> Rachel
>
> I'm impressed by your elaborate answer. Very informative and based on
> legal grounds.
>
> I'm curious however when the community will have a chance to 'chambua' the
> Dominance Report?
>
> *Ali Hussein*
> *Principal*
> *Hussein & Associates*
> +254 0713 601113 <+254%20713%20601113>
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: http://ke.linkedin.com/in/alihkassim
>
> "We are what we repeatedly do. Excellence, therefore, is not an act but a
> habit."  ~ Aristotle
>
>
> Sent from my iPad
>
> On 3 Mar 2017, at 4:20 PM, Alwala, Rachel via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
> Hi Victor and listers,
>
> Based on the questions you raise, allow us to draw the distinction and
> points of convergence on the roles of CA and CAK with respect to powers
> over competition matters and on dominance declaration.
>
> *Powers over competition matters*
>
>
> It is important to note that both institutions have powers over
> competition matters in the ICT sector.  The Communication Authority has
> both ex-ante and ex-post jurisdiction while the Competition Authority has
> only ex-post jurisdiction. Ex ante regulation is the setting of rules and
> obligations to be adhered to by service providers (before the event) deemed
> to be in a position of significant market power which, either in itself or
> through possible abuse of such a position, may impair competition to the
> detriment of consumer welfare. Examples of ex ante rules that are focussed
> on wholesale services  such as interconnection (applicable to all
> networks), access to USSD channel ( applicable to mobile money platforms)
> etc, where each network is deemed to have monopoly over its own network
> when terminating calls from, or providing access to other networks.The
> philosophy behind  Ex post regulation punishes abuse of dominance. The
> telecommunications and the ICT sector in general applies both forms of
> regulation.
>
>
>
> The Communication Authority's powers in relation to competition are
> derived from the Kenya Information and Communications Act 1998(as amended
> in 2013 and 2015) (KICA). These powers include:
>
> i.      the promotion of competition (section 23(2)(b))
>
> ii.     ex-ante and ex-post jurisdiction (sections 84Q, 84R, 84S and 84T)
>
> iii.   determining which licensees are “dominant in a relevant market”
> (section 84W).
>
> On the other hand, the Competition Authority derives its mandate from the
> Competition Act, 2010 (with the 2012 and 2014 amendments) (Competition
> Act). These powers include:
>
>
>
> i.      ex-post (with some powers in relation to market inquiries)
>
> ii.     to investigate complaints and markets to establish if there has
> been an abuse of dominance or anti-competitive behaviour (including
> restrictive trade practices) (Parts III, IV and V of the Competition Act)
>
>
>
> *Definition of Dominance*
>
>
>
> Notably, the definition of a dominant operator in both Kenya Information
> and Communication Act and Competition Act is similar.
>
>
>
> The Competition Act defines  a dominant position as follows:
>
>
>
> *S4(3) of the Act*:
>
>
>
> A person has a dominant position in a market if the person –
>
>
>
> (a) produces, supplies, distributes or otherwise controls not less than
> one-half of the total goods of any description that are produced, supplied
> or distributed in Kenya or any substantial part thereof; or
>
>
>
> (b) provides or otherwise controls not less than one-half of the services
> that are rendered in Kenya or any substantial part thereof.”
>
>
>
> In the 2015 amendment of KICA the definition of “dominant
> telecommunications provider” cross-references s4 and 23 of the Competition
> Act i.e. A person has a dominant position in a market if the person –
>
>
>
> (a) produces, supplies, distributes or otherwise controls not less than
> one-half of the total goods of any description that are produced, supplied
> or distributed in Kenya or any substantial part thereof; or
>
>
>
> (b) provides or otherwise controls not less than one-half of the services
> that are rendered in Kenya or any substantial part thereof
>
>
> *Power over Dominance*
>
>
>
> On matters of dominance, KICA confers the CA with primary decision-making
> powers in this regard. Particularly, s84W  “*The Commission may, in
> consultation with the Competition Authority of Kenya* and after due
> process, declare a person or institution by notice in the Gazette, to be a
> “dominant telecommunications service provider” for the purposes of this
> Act”.
>
>
> Moreover, the Fair Competition and Equality of Treatment Regulations, 2010
> expounds more on how the Authority will go about the process of declaration
> of dominance. For the avoidance of doubt, the Kenya constitution 2010,
> envisaged the creation of an independent regulator,free from both
> commercial and political interests; and which the Supreme Court re-affirmed
> that that envisaged independent regulator is the CA.
>
>
> I hope that sheds some light that can inform discussions.
>
>
> Regards,
>
>
> Rachel
>
>
> From: kictanet <kictanet-bounces+alwala=ca.go.ke at lists.kictanet.or.ke> on
> behalf of KICTAnet Discussions <kictanet at lists.kictanet.or.ke>
> Reply-To: KICTAnet Discussions <kictanet at lists.kictanet.or.ke>
> Date: Friday, February 24, 2017 at 1:41 PM
> To: Rachel <alwala at ca.go.ke>
> Cc: 'Victor Kapiyo' <vkapiyo at gmail.com>
> Subject: Re: [kictanet] Safaricom faces M-Pesa break up in market
> dominance war
>
> I would be interested to understand from CA, the role of the Competition
> Authority in this discussion vis its mandate under the Competition
> Act,2010, and why the Communications Authority continues to have a role on
> matters competition. IMO, I think it would be prudent to have the
> Competition Authority take the lead on this question given its mandate
> under the law.
>
> *Victor Kapiyo*
>
> Advocate of the High Court of Kenya & Commissioner for Oaths
> *Suite No. 8, Centro House, Westlands, Nairobi*
> *Office Tel: 020 440 4410; Cell: 0721 847 178 *
> ====================================================
> *“Your attitude, not your aptitude, will determine your altitude” Zig
> Ziglar*
>
> On 23 February 2017 at 23:55, Gabriel via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
> 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 ....
>
> Get Outlook for iOS <https://aka.ms/o0ukef>
>
> ------------------------------
> *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 <+254%20713%20601113>
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: http://ke.linkedin.com/in/alihkassim
>
>
> 13th Floor , Delta Towers, Oracle Wing,
>
> 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
>
>
> Co-Convenor
> Kenya ICT Action Network (KICTANet)
> Twitter:@ggithaiga
> Tel: 254722701495
> Skype: gracegithaiga
> Alternate email: ggithaiga at hotmail.com
> Linkedin: https://www.linkedin.com/in/gracegithaiga
> www.kictanet.or.ke
>
> "Change only happens when ordinary people get involved, get engaged and
> come together to demand it. I am asking you to believe. Not in my ability
> to bring about change – but in yours"---Barrack Obama.
>
>
> _______________________________________________
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>
>
> Co-Convenor
> Kenya ICT Action Network (KICTANet)
> Twitter:@ggithaiga
> Tel: 254722701495
> Skype: gracegithaiga
> Alternate email: ggithaiga at hotmail.com
> Linkedin: https://www.linkedin.com/in/gracegithaiga
> www.kictanet.or.ke
>
> "Change only happens when ordinary people get involved, get engaged and
> come together to demand it. I am asking you to believe. Not in my ability
> to bring about change – but in yours"---Barrack Obama.
>
>
> _______________________________________________
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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
>
> _______________________________________________
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> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
>
> _______________________________________________
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>
>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
>
>
>
> --
> Grace Mutung'u
> Skype: gracebomu
> Twitter: @Bomu
>
> <http://www.diplointernetgovernance.org/profile/GraceMutungu>
>
> PGP ID : 0x33A3450F
>
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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.

-- 
*Mercy Mutemi, Advocate*.
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