September 24, 2018

Airtel Threatens to Exit Kenyan Market


By Nina Mulamba

Airtel has threatened to exit the Kenyan Market citing frustrations with the Communications Authority of Kenya after the regulatory body allegedly failed to act on Safaricom’s market control.

Airtel has persistently complained over what it terms Safaricom’s dominance since it entered the Kenya market in 2010 following its acquisition of Zain Telecom’s operations.

“Airtel is likely to exit Kenya if the market structure is not addressed in terms of dominance. The shareholders of Airtel at some point will say enough is enough,” said the Chief Executive Adil El Youssefi during the launch of a promotional product dubbed “Smartika”.

He went ahead to say that Airtel has been patient because the Kenyan market is lucrative but a time is coming when they will finally get tired of the monopoly.

“When you have been in business for over five years without making profit and lost almost over Ksh. 50 Billion, you will get tired,” he said.

Airtel almost got its way early last month after the ICT Ministry and the Communications Authority of Kenya tabled proposals in Parliament to have Safaricom declared dominant but the Attorney General Githu Muigai intervened saying that the move was illegal. This prompted the Communications Authority to issue a statement saying market dominance is not tied to a specific firm.

According to the Communication Authority of Kenya, subjecting Safaricom to restrictive regulations without proof on dominance would be going against the competition law and the international best practice. The regulator said dominance in the telecommunication sector was delineated to specific market segments such as mobile voice, fixed voice, data, voice termination, wholesale broadband internet, short message service (SMS) and mobile.

“We are extremely disappointed that the regulator wants to take up to 18 months to finish the process of studying dominance in the market. Dominance by one player has gotten worse since 2010 and if this is not tackled Kenya will go back to monopoly situation,” El Youssefi said.

In July, the telecommunication firm’s main shareholder, Bharti Airtel of India, announced it was exploring the sale of its subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone to France Telekom which adds credence to its latest threat.

Airtel is currently in trouble with the Communications Authority of Kenya over the delayed payment of Ksh. 2.1 Billion for the renewal of its operating license. It is currently operating on the license obtained after buying Yu Mobile assets late last year.

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