Stop whining and work hard, Safaricom tells Airtel

Stop whining and work hard. This was the message that Safaricom had for Airtel on Tuesday. Safaricom said this while defending itself from Airtel’s claim that it is a dominant player in the telecommunications market.

During a session with the Senate Standing Committee on Information and Technology, Safaricom said that competition is healthy and that any player can build its market share through increased investments and innovation.

“Safaricom does not have any market power and therefore Safaricom cannot act independently of other players and consumers,” Safaricom chief executive officer Peter Ndegwa said. “It is our position that there should be no adverse regulatory actions that would stifle the growth of the industry. There is room for great investment in the industry and we look forward to seeing additional investment by other players into the market.”

Safaricom’s defense followed a presentation to the committee by Airtel, in which Airtel accused the Communications Authority of dragging its feet in declaring Safaricom a dominant market player.

“There has been no dispute as to the status of Safaricom as regards its dominance status and significant market power. However, there has been reluctance in declaring Safaricom dominant in the retail mobile market and the retail mobile money market,” Airtel told the committee.

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Airtel also argued that declaring Safaricom dominant was not the equivalent of punishing success. “A notion has been perpetuated that declaring Safaricom a dominant player is punishing success, which in our view is blatantly myopic,” said Airtel. However, Safaricom reasoned that it has heavily invested in infrastructure to attain its current status, which other players in the market have not.

Safaricom also highlighted its tax obligations, saying it was currently the highest tax payer among all local corporates. “Through our operations in the Kenyan economy, we have created additional government revenue of approximately Sh. 83 billion per annum over the past decade as a result of upstream and downstream economic activity. In the last financial year alone, Sh. 105.9 billion in taxes, duties and licence fees was paid by Safaricom,” said Safaricom.

Currently, Safaricom has a 64 per cent market share in comparison to Airtel’s 27 per cent.