Safaricom Warns Draft Antitrust Laws Threaten Industry

Updated on

Safaricom Ltd., East Africa’s biggest mobile-phone operator, opposes draft antitrust laws proposed by the industry regulator because they may curb efficiency and investment, Chief Executive Officer Bob Collymore said.

The regulations mooted by the Communications Authority of Kenya propose penalizing any telecommunications company with a market share of more than 50 percent, which will be required to inform rivals of planned price increases, Collymore said in an interview Friday in the capital, Nairobi. Safaricom has a 67 percent share of Kenya’s mobile market.

“We don’t think there is need for new regulations because existing regulations give the Communications Authority the procedure to identify a dominant player,” Collymore said.

Safaricom, 40 percent owned by U.K. carrier Vodafone Group Plc, is East Africa’s biggest company by market value. It controls about three quarters of mobile-money transfers -- a way of making payments using mobile phones -- where it faces competition from a new product by Bharti Airtel Ltd.’s Kenyan unit. Other rivals include Telkom Kenya Ltd., a joint venture between the government and Orange SA.

The proposed law will enable the regulator to declare a company dominant if it earns “supernormal” profit, according to a draft of the bill e-mailed by Safaricom, which doesn’t provide further details. Companies will also be required to seek the authority’s approval before running promotional offers, it said.

Calls to Francis Wangusi, director-general of the Communications Authority, didn’t connect when Bloomberg sought comment from the regulator.

Safaricom shares dropped 0.3 percent to 15.95 shillings by the close of trade Friday, paring its gain so far this year to 14 percent.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE