November 24, 2017

Tug of War Between Airtel Money and M-pesa

mobile-money

By Nina Mulamba

Despite the fact that Safaricom and Airtel came up with an agreement on how they can carry out their business peacefully, the agreement has been breached suddenly when Airtel found out that Safaricom is coercing their agents to remove Airtel brands from their shops.

The mobile operator through its lawyers, Mukite Musangi Advocates, has written to Safaricom accusing it of coercing its mobile money transfer agents to remove Airtel branding from their shops and stop offering Airtel Money services failure to which they would have their M-Pesa tills disconnected.

Airtel argues, that the move  is against a settlement the two firms had with the Competition Authority of Kenya (CAK) on July last year removing exclusivity of the M-Pesa agents and allow M-pesa agents to offer Airtel money and M-pesa services freely.

On the other hand, Safaricom claimed that they are clean and they have not ordered their agents to deface Airtel.

“We have not issued any directives to our agents or dealers to remove or alter any branding in their shops. Without any evidence these claims amount to unsubstantiated allegations and a smear campaign against Safaricom,” said Stephen Chege, director of corporate affairs at Safaricom. “In fact, we are currently involved in a court case with Airtel as they had previously pulled down Safaricom’s branding and were illegally using our M-Pesa logo without our consent.”

Airtel argues that since Safaricom’s mobile money agents account for about 88 per cent of the entire telecoms industry, most transactions take place on its network denying Kenyans choice by charging those outside its network double the costs.

The service providers had agreed to allow investors run M-Pesa services with rivals such as Airtel Money and Orange Money in the same shop.

The push by Airtel comes as the industry regulator is preparing to hire an international firm that will examine Kenya’s telecommunication and broadcasting sectors for market dominance and anti-competitive behavior.

The consultant’s brief also includes review of existing policy, legal and regulatory frameworks on competition, recommending appropriate changes to enhance effectiveness as well as give remedies for issues identified.

The CA says the consultant’s report is expected to offer insights into the market status and facilitate decision-making in prescribing proportionate and appropriate regulatory actions.

Independent research will assist the authority in identifying and developing the key market interventions necessary to facilitate continued growth and economic efficiency in the sector, while promoting sustainable investments, access and affordability, the tender documents say.

The consultant is also required to propose the best ways by which the identified barriers and factors considered a hindrance to growth can be minimized or eliminated, and to come up with specific stimulus that can be injected in the Internet/data sub-segment to ensure effective competition, accessibility, affordability and growth.

 

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