“Airtel is likely to exit Kenya if the market structure is not addressed in terms of dominance,” chief executive Adil El Youssefi told journalists in Nairobi. He said Airtel has been patient because the Kenyan market is lucrative, adding “the shareholders of Airtel at some point will say enough is enough”.
“When you have been in business for over five years without making profit and lost almost over Sh50 billion, you will get tired,” he said. He spoke during the launch of a promotional product dubbed “Smartika”. 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 has persistently complained over what is says is Safaricom’s dominance since it entered the Kenya market in 2010 following its acquisition of Zain Telecom’s operations. The company started out as Kencell before it was bought and renamed Celtel which was later sold to Zain before being bought by Bharti Airtel. Airtel almost got its way early last month after the ICT ministry and the CA tabled proposals in parliament to have Safaricom declared dominant. The Attorney General Githu Muigai however intervened saying the move was illegal prompting the CA to issue a statement saying market dominance is not tied to a specific firm.
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 and mobile. CA said it would analyse each of the segments separately in a bid to determine their relative competitiveness in line with the international best practice. The Competition Authority of Kenya has maintained there is no evidence to show Safaricom is abusing dominance.
According to the CAK, subjecting Safaricom to restrictive regulations without proof on dominance would be going against the competition law and the international best practice. “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.
Essar owned Yu Mobile closed shop in Kenya in January, while French controlled Orange said last week it was looking at possible exit from the Kenyan market by selling its 70 per cent stake in Telkom Kenya. Airtel is also currently in trouble with the CA over the delayed payment of Sh2.1 billion for the renewal of its operating licence. It is currently operating on the licence obtained after buying Yu Mobile assets late last year.
Source: The Star