What the debate about Safaricom dominance is really about

Tuesday January 9 2018

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That Safaricom is dominant in the voice, data and mobile money markets is not really debatable. What is debatable is what the regulator plans to do about it. 

Over the past four years the communication regulator has breathed hot and cold over the issue and most recently hired an international consultant, Analysis  Mason, to do a comprehensive telecoms study and advise on the way forward.

The report from the consultants leaked last year, with the news that they had proposed a breakup of the giant company as a way to resolve the dominance question.

I recall arguing against such a recommendation to split Safaricom since I felt the issue at hand is really not the size of the company but rather the central role their flagship product M-Pesa has over our social, economic and political fabric.


In a supposedly more recent leaked report, it was reported that the consultants had dropped the recommendation to split the company.

This led to a hue and cry from various stakeholders, particularly Safaricom's competitors, forcing the regulator to issue a press release on the Kenya ICT Action Network  list urging all parties to ignore the allegations, pending the finalisation of the report.

Clearly, Safaricom’s dominance and what to do about it has been and will continue to be a hot potato irrespective of how the consultants finally conclude and present their recommendations.

But many would wonder, why would someone want to curtail the success of one company by splitting it up? 


This is a company that is not only contributing heavily to our tax base but also transforming lives in many ways, and has brought fame and glory to Kenya.

It is easy to understand why competitors would want the runaway success of Safaricom to be regulated. After all, a little help in catching up with the giant's subscriber numbers in voice, mobile money and data would be most welcome.

But this is a pedestrian view of the dominance debate.   It is never about Safaricom and its competitors. It is instead about what it means having our socio-economic lives intricately dependent on the success or failure of a single company.

It is about providing sustainable alternatives – in the unlikely event that the shareholders of Safaricom decide one day that they have made enough money and they are now moving their interests from being a telco company to being some random NGO interested in, say, climate change or renewable energy.


Of course there are license conditions to be met before liquidating Safaricom, but they are not particularly insurmountable.

The point is, Safaricom, and any other telco for that matter, can choose to hang its boots and Kenya as a country must find a way to move on, in the shortest time possible.

Usually that means moving to competitor’s networks.  But it is too ambitious to imagine that a competitor’s organisation can absorb capacity that is perhaps ten times higher than what its current performance is.

Whereas the technical capacity can easily be scaled up, the organisational capacity and network does not scale up or down quite as easily. Organisational capacity includes soft issues that range from customer support, agents and supplier networks.


One cannot just scale up these items overnight. They must be built one step at a time over long durations. That can only happen if Safaricom's competitors are indeed peers in all aspects of the business and are not ‘dominated’ as they are at the moment.

In other words, the success of Safaricom and equally the success of its competitors is the only guarantee that Kenyans will effectively move on – in the unlikely event that Safaricom's operations fail.

How to sustain an effective competitive environment in the telco sector is the million-dollar question. But it is also the reason we pay the employees at the communication regulator hefty salaries. We expect them to burn the midnight oil and give us the answers.

Mr Walubengo is a lecturer at Multimedia University of Kenya, Faculty of Computing and IT. Email: [email protected], Twitter: @Jwalu