Phone giants call up political favours as price war rages

Last month, the consultants came up with a report titled “Regulatory Framework Governing Kenya’s Telecommunications Industry.”

Its findings basically supported Safaricom’s case. For instance, Frontier recommended a stricter definition of the term “market dominance” and longer procedures for declaring a player as dominant.

The consultants also put emphasis on abuse of market dominance and introduced a 40 per cent threshold for dominance.

They said market dominance ought to be designated by sector and argued that by setting the market dominance threshold at 25 per cent, the regulations had only targeted one player, Safaricom.

But even as the parties were negotiating how to incorporate amendments into the regulations, the CCK also published findings of a separate study conducted on its behalf by PricewaterhouseCoopers.

Titled “Competitive Assessment of the Telecommunications Sector and its Contribution to GDP,” the study accused Safaricom of engaging in on net/off net tariff differentiation to entrench its market share and dominance.

It recommended that interconnection tariffs be lowered to lessen incentives and the ability of Safaricom to set uncompetitive pricing structures.

CCK insists that it did not publish the PricewaterhouseCoopers study to counter the government-sponsored study by Frontier Economics.

As we went to press, the amended regulations had not been published. Once they are, the likelihood is that they will provoke an uproar even louder than the price wars.