Telkom Kenya is seeking regulatory directives from Parliament to require Safaricom to reduce the fees it charges for financial transfers to competing platforms through its mobile money service M-Pesa.
The country’s largest telecom presently charges lower rates for transactions among its customers than for cross-platform deals, which competing carriers believe is anticompetitive.
Safaricom’s rivals have made a number of proposals to the Senate Standing Committee on Information, Communication, and Technology, arguing that the business is dominating and needs to be reined in to prevent competitors from collapsing.
According to Telkom, the usage of varied pricing has contributed to consolidate M-Pesa’s dominance – which has a more than 90% market share – and has left competing platforms like as Airtel Money and T-Kash with little possibility of coming up.
Safaricom claims that their pricing structure has helped them attract more subscribers and keep them locked in, with no reason to switch to other platforms, prolonging the “club effect.”
When an M-Pesa client sends Sh1,000 to another M-Pesa user, the price is Sh12, which is 75.5 percent cheaper than the Sh49 it costs to send the same amount to a receiver on a rival platform.
“The relevant regulators, Central Bank of Kenya (CBK), Communications Authority of Kenya (CA) and Competition Authority of Kenya (CAK) need to co-operate and co-ordinate the implementation and enforcement of agent interoperability,” the telco said.
CBK also has to develop merchant and biller interoperability, as well as agency interoperability, according to the business. It also wants Safaricom split into distinct businesses that provide mobile money and telecommunications services.
Telkom Kenya claims that Safaricom’s monopoly in voice, mobile money, and other services is so bad that authorities must intervene to prevent rivals from collapsing or exiting.
Safaricom defended itself against accusations that it is a monopoly that abuses its market position to the detriment of competitors.
The company said there was healthy competition in the industry and that any player could build its market share through increased investments
