[kictanet] Telcos CEOs on the spot in push to declare Safaricom dominant

Sat Aug 18 14:30:04 EAT 2018

Safaricom’s parent company sued its Italian competitor in 2013. “Vodafone
Sues Telecom Italia for €1bn Over 'Dominance Abuse' Is Kenya unique market
void of proper ex-ante, ex-post regulation.

ibtimes.co.uk/vodafone-telec…

Vodafone Sues Telecom Italia for €1bn Over 'Dominance Abuse'
By Jerin Mathew  <https://www.ibtimes.co.uk/reporters/jerin-mathew>On
8/5/13 at 7:27 AM
[image: Telecom Italia]A Telecom Italia antenna booster is seen in northern
Rome

Vodafone's Italian subsidiary is suing Telecom Italia for allegedly abusing
its dominant position in the country as the British telecom giant is
seeking to overcome hurdles impeding profitability.

Vodafone Italy which is 77% owned by Vodafone is seeking damages of more
than €1bn ($1.3bn, £869m) from Telecom Italia. The Italian company has
committed a series of abuses from 2008 to 2013 "with the intention and
effect of impeding growth in competition in the Italian fixed-line market",
claims Vodafone.

Vodafone charged that it suffered severe customer loss due to Telecom
Italia's dominant position in the market.

In addition, Telecom Italia allegedly restricted Vodafone Italy's ability
to grow its fixed-line business, and forced it to pay artificially high
costs to compete in the market.

*Rising Competition in Europe*

Last month, Vodafone said
<https://www.ibtimes.co.uk/vodafone-q1-earnings-competition-price-pressure-492417>
its
first quarter income and sales were hit by regulation, rising competition
and the ongoing recession across Europe.

First quarter service revenue at Vodafone fell 3.5% to £10.16bn, which is
the fourth successive quarterly decline. In Italy and Spain, the company
posted double-digit falls.

Service revenue in southern Europe plunged 14.4%. Italy was down 17.6%
owing to "price reductions, a deteriorating economic environment and the
ongoing impact of steep mobile-termination-rate cuts".

Spain fell 10.6% owing to a "lower customer base and the increased
popularity of discounted-converged consumer offers in that market".

With the lawsuit, Vodafone intends to tackle its troubles in Italy where it
finds market conditions tough.

*Market Dominance Questioned*

In May, Italy's competition authority imposed a fine of about €140m on
Telecom Italia for abusing its dominant market position as owner and
manager of the country's largest fixed-line telephone network.

Pressured by peers and authorities, the company is planning to spin off its
fixed-line copper network that gives it a competitive edge.

The Vodafone case filed at the Court of Milan is the latest blow to Telecom
Italia CEO Franco Bernabè, who is looking to restructure the group amid
falling revenues in its fixed-line and online business. It had to write
down a further €2.2bn in goodwill for the first half of the year,
increasing its impairments close to €14bn since the start of 2011.

Telecom Italia rejected the allegations of Vodafone and said it was
confident of demonstrating the correctness of its behaviour.

It is also appealing against the antitrust fine, which was imposed after a
three-year probe prompted by rivals Wind, Italy's third-largest mobile
operator, and broadband company Fastweb.

On Mon, 30 Jul 2018 at 18:37, Walubengo J via kictanet <
kictanet at lists.kictanet.or.ke> wrote:

> @Ali, am with Eng Kariuki on this one ;-)
>
> Indeed we are in the age of platforms (read MPESA as an example).  And yes
> we can't blame Safcom for milking MPESA to the hilt (eg. most government
> service mobile money payments have a preferred providers ;-).
>
> I would rather blame the regulator for not seeing this coming, and when
> they finally saw it, they dilly dallied to intervene (remember 2year market
> study?)  Furthermore, previous thinking that platforms are sacred corporate
> jewels not to be touched or  that  all markets will eventually self-correct
> have been proved wrong elsewhere with FB, Google, etc coming under heavy
> 'regulatory fire' in the recent past.
>
> I dont claim to have the answer to Safcom dominance, but I can claim very
> strongly that the market forces will never self-correct the dominant
> position that Safcom continues to enjoy.
>
> Is dominance  a good thing? Yes, for Safcom.  Is it a bad thing?  Yes, for
> a country that may realize that they cannot transmit election results
> simply because the competing providers dont have presence in some areas
> under their zones. Or that you can't access internet or send mobile money
> coz Safcom network sneezed for an hour or two as it happened a week ago.
>
> I have said this before, the dominance conversation must be rise above
> competition issues and begin to be interrogated at the level of national
> security.  If Safcom beats competition to pulp, it is good for its
> shareholders (me with my very small shares  included), BUT it is bad thing
> for the country that may discover they have no commensurate alternatives.
>
> That said, I dont believe baby sitting competition to beat Safcom is the
> answer either.
>
> Only a new innovation, perhaps the next 'MPESA on a Blockchain' sort of
> thing will be able to give  Safcom the challenge it deserves.
>
> walu.
>
> On Monday, July 30, 2018, 6:00:10 PM GMT+3, Admin CampusCiti via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
>
> John
>
> Fortunately I’m not a graduate of Telecommunications Law.. So I can see
> clearly.. #JustSaying..
>
> I have always advocated for a review of the Framework on competition in
> not just the Telco sector but most sectors. The Age of Platforms Is here my
> brother. And we ignore it or focus on old school models of competition at
> our own risk. The Government is a very inefficient way to correct market
> conditions. Look at what is happening the world over.
>
> Why don’t we go ahead and also declare Uber dominant? Let’s engage on this
> issue and not shoot from the hip. Chairman Kisang is my hero. He must have
> been smoking the right thing that morning. :-)
>
> *Ali Hussein*
>
> +254 0713 601113
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: http://ke.linkedin.com/in/alihkassim
> <http://ke.linkedin.com/in/alihkassim>
>
> Blog: www.alyhussein.com
>
> "Discovery consists in seeing what everyone else has seen and thinking
> what no one else has thought".  ~ Albert Szent-Györgyi
>
> Sent from my iPad
>
> On 30 Jul 2018, at 5:37 PM, John Kariuki via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
> Listers, Ali.
> It is a fact that  "In certain telecommunications market segments in
> Kenya, SAFARICOM is dominant. Any graduate of telecommunications law will
> confirm that. It has nothing to do with punishing success or innovation. It
> is a matter of telecommunications and competition laws. If it was in UK or
> EU I have no doubt that the issue would not have dragged this long.
> Remember we also have the 'small problem' of Data Protection which has
> dragged for at least 10 years. Just to repeat what one consultant told my
> then bosses many years ago and I quote  "The fact that you refuse to see a
> problem does not mean that it does not exist". If only we had listened!
>
>
> Sent from Yahoo Mail on Android
> <https://go.onelink.me/107872968?pid=InProduct&c=Global_Internal_YGrowth_AndroidEmailSig__AndroidUsers&af_wl=ym&af_sub1=Internal&af_sub2=Global_YGrowth&af_sub3=EmailSignature>
>
> On Mon, Jul 30, 2018 at 14:37, Barrack Otieno via kictanet
> <kictanet at lists.kictanet.or.ke> wrote:
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> 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.
>
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