Health CS James Macharia defends Safaricom’s dominance

By: DENNIS ODUNGA

Health Cabinet Secretary James Macharia has defended telecoms operator Safaricom over calls to declare the company a dominant player in the market saying the move risks killing innovations.

Mr Macharia said companies that invest in emerging technologies meant to improve on service delivery and spur economic development ought to be encouraged as opposed to being unnecessarily attacked.

“If a company invests money and achieves dominance, what is wrong with that?” Mr Macharia said during the launch of ‘Sema Doc’ technology at the Serena Hotel, Nairobi on Tuesday.

The technology, launched by First Lady Margaret Kenyatta, would enable patients to interact directly with doctors to improve health care especially in remote parts of the country.

The Cabinet Secretary said the private sector plays a crucial role in the development agenda of a country and it is improper to discourage companies that have invested in growing their businesses, from doing so.

“Innovation is key in achieving a competitive edge in the market. Partnering with the private sector guarantees success of any venture,” Mr Macharia said during the forum that was also attended by Safaricom CEO Bob Collymore.

The Competition Authority of Kenya (CA) has also opposed the call to declare Safaricom a dominant player saying it would only be fair to victimise the giant operator if it abuses the position, to the disadvantage of other companies in the market.

AIRTEL

Airtel Kenya CEO Adil El Youssefi has maintained that failure by the regulators to declare Safaricom dominant would edge out its rivals and leave it as the only profitable mobile firm in the country.

He said exiting the market due to unfair competition would leave many people jobless besides giving consumers a raw deal.

The company wants Safaricom split into three independent entities with M-Pesa being among those services that would stand on their own and all other telecommunication firms be allowed to use the service.

The company would operate in a more restricted business environment in terms of marketing and pricing, if it is declared a dominant player.

Mr Collymore recently told the Senate Committee on Information, Communications and Technology (ICT) that limiting the company’s dominance would affect its wish to compete in the global market.

He said the telecommunications regulator does not need to impose sanctions on the company as long as it is not abusing its dominance in the market.

The Chairman of the ICT Committee, Mr Mutahi Kagwe said mobile service providers can share some of their common facilities to improve on service delivery and create more jobs, without hurting each other’s profit prospects.

“We are concerned about equity amongst players in the telecommunications industry,” said Mr Kagwe.

Safaricom has emerged as the most profitable firm in East and Central Africa and rival companies like Airtel, Telkom Kenya have been left watching the impressive results, from a distance.

The Fair Competition and Equality of Treatment 2015 regulations contained in the Communications Act are part of deliberate efforts to introduce measures that would see Safaricom declared a dominant player and its operations controlled.

Currently, Safaricom controls the telecommunications market with voice mails, SMS, Mobile data and mobile money transfer services raking in billions in profits.