Vodafone's Kenya Unit Hits Out at `Stupid' Plan to Curb SizeBy
Safaricom should split into wireless, banking units: Lawmaker
Kenya’s largest company awaits regulator report into dominance
Safaricom Ltd. said any move to split Kenya’s biggest company into separate mobile-phone and banking businesses would be “plain stupid,” curbing job creation and growth in East Africa’s largest economy.
“The economies of Africa need more big players,” Chief Executive Officer Bob Collymore told reporters in Nairobi, the capital, on Wednesday. “We don’t believe anything we do today is anti-competitive. We don’t believe dominance is a crime.”
The CEO of the Vodafone Group Plc subsidiary was reacting to reports in newspapers including the Nairobi-based Standard that Kenyan lawmaker Jakoyo Midiwo is seeking to have telecommunication companies separate their businesses depending on service provision. The industry regulator is preparing a study on market dominance that will be released this year.
The survey’s outcome poses the biggest risk for Safaricom, Eric Musau, a research analyst at Nairobi-based Standard Investment Bank, said at the time of the company’s first-half earnings in November.
Safaricom is the country’s biggest mobile provider with 69 percent market share as of the end of September, according to the Communications Authority of Kenya. Its closest competitor is the national unit of Bharti Airtel Ltd., with 17.5 percent. The company’s M-Pesa mobile-banking product is also a significant market leader, processing about 851 billion shillings ($8.2 billion) of transactions during the third quarter last year, about 79 percent of the country’s total.
“If they come up with something silly, then it has the ability to negatively impact the industry,” Collymore said. “You can’t blame the ones who are efficient.”
Previous attempts to curb Safaricom’s dominance include regulations mooted in 2015 to penalize telecommunications companies with a market share of more than 50 percent. That law also proposed enabling the regulator to declare a company dominant if it earned “super-normal” profit, according to a draft of the bill.