[kictanet] IEA position on CA's Analysys Mason Dominance Report

Fri Apr 6 07:01:41 EAT 2018

I
t is easy to understand where I
EA
 is coming from in saying that further price controls may not necessarily
yield desired results. It would definitely help to have more light on the
report and surrounding issues. I would also be interested to know whether
attempts have been made at negotiating issues such as infrastructure
sharing. We might also want an update on implementation of the access study
gaps report that was shared by CA a while back. After the elections, a
really good case for access in under-served areas was made. With
involvement of county governments, so much can be improved without the
overly drastic recommendations in the report.

That said, I am also wondering about the future of the mobile economy.
Safaricom for one has already invested in moving beyond Mpesa. We are
already seeing Safaricom as a one stop shop platform-payment, music, tv,
internet, taxis and other apps....There are pros and cons of this model.
Might we be talking of "platform neutrality" in the future?

Best,

2018-04-05 13:35 GMT+03:00 Consumers Federation of Kenya (Cofek) via
kictanet <kictanet at lists.kictanet.or.ke>:

> *Dear All,*
>
>
>
> *Greetings from the Cofek team!*
>
>
>
> *We are requesting your kind response to the article below as carried by
> “The Standard” today. Your response would inform our view on the State of
> Consumer Protection Report on ICT sector in regard to this specific
> issue.We also hope that Mr Matano Ndaro, CA Director of Competition can
> also give us his take. *
>
>
>
> *By the way - should CA license and “regulate”” on competition” at the
> same time? Could it present a conflict of interest that the licensee of
> MNOs is also prescribing and enforcing competition? Kindly give us your
> feedback asap. *
>
>
>
> You could soon pay higher costs for mobile services if the Communications
> Authority of Kenya (CA) follows through with plans to introduce price
> controls in the sector, economists have warned.
>
> The Institute of Economic Affairs (IEA) said yesterday the recommendations
> by UK-based consultancy firm Analysys Mason, especially on price controls
> in its study on market dominance laid the basis for tariff hikes.
>
> "Price controls are not effective and inconsistent with 20 years of
> industry liberalisation and most national economic policy," said IEA
> Executive Director Kwame Owino during a media briefing on analysis of the
> CA report on competition in the telecommunications sector in the country in
> Nairobi.
>
> "Reintroduction of price controls would be a major policy reversal.” The
> study presented early this year by Analysys Mason concluded that Safaricom
> has dominant market share currently standing at 70 per cent and 80 per cent
> in the mobile communications and mobile money market respectively and
> called for regulatory interventions.
>
> Among the recommendations was for Safaricom to share part of its tower
> infrastructure with other service providers for a period of five years at
> tariffs prescribed by CA. "Our analysis shows this dominance has been
> achieved because of the risk that firms have taken to invest in tower
> infrastructure," said Mr Owino.
>
> "Firms have different appetites for investment and compelling one firm to
> share infrastructure they’ve invested in at fixed prices is not
> defensible on economic grounds."
>
> The report had initially recommended Safaricom share its tower
> infrastructure with Airtel and Telkom in 14 counties where
> telecommunications infrastructure is lacking that were then halved to
> seven.
>
> Forcing infrastructure sharing among providers has also been criticised as
> only useful in redistributing income among existing players but stopping
> short of bringing costs down or improving product experience for consumers.
>
>
> The IEA boss further explained that some of the recommendations in the
> report could see the CA overreach its mandate as a regulator, stifling
> innovation and product differentiation among operators.
>
> “There is no policy justification to restrict the freedom of firms to
> engage in lawful marketing in any format,” said Mr Owino. “This is the
> most unreasonable proposal with no benefit to aid market competition but
> would harm consumers.”
>
> Analysys Mason had recommended the CA enforce a policy to limit Safaricom
> from promotions and loyalty schemes that can be replicated by other
> operators.
>
>
>
> Kind regards,
>
>
>
>
>
> Onesmus Mutungi
>
> *Program Assistant *
>
> Consumers Federation of Kenya (Cofek)
>
> Rehema Place, Block F Suite 45
>
> P.O Box 28053-00200, City Square
>
> Tel. +2540202615496, 3861718
>
> Mobile: 0715555550, 0733180008
>
> Email  : hotline at cofek.co.ke
>
> Web   : www.cofek.co.ke
>
> COFEK *– Restoring Consumer Confidence and Pride*
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-- 
Grace Mutung'u
Skype: gracebomu
@Bomu
PGP ID : 0x33A3450F
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