Kenya's $7.4bn telecoms giant safe from being declared market dominant, regulator says

Safaricom is internationally known for its M-Pesa mobile money service but also dominates its home market.

KENYA’s competition regulator said it won’t impose penalties on mobile-phone company Safaricom Ltd. to limit its market dominance as there’s no evidence to suggest the company has abused its position.

“Being dominant in a market is considered a red flag but it’s not an illegality,” Competition Authority of Kenya Director General Francis Kariuki said in an interview on Tuesday in the capital, Nairobi. 

“As far as Safaricom is concerned there is nothing on my desk to suggest it has abused its position.” The company is internationally known for its M-Pesa mobile money service.

Safaricom, 40% owned by UK carrier Vodafone Group Plc, had 67% of mobile-phone subscriptions in East Africa’s biggest economy at the end of last year and 84% of call minutes, according to a report by the Communications Authority of Kenya. 

The shares traded 0.9% higher at 17.60 shillings as of 2:32 p.m. in Nairobi, valuing the company at 705 billion shillings ($7.4 billion). The stock is up 25% this year, compared with a 10% gain on the Nairobi Securities Exchange All-Share Index.

Communications Secretary Fred Matiang’i wrote to industry regulators late last year to ask why Safaricom hadn’t been declared a dominant provider, the Daily Nation newspaper reported February 17. 

That could lead to penalties for Safaricom such as an order to share its network with smaller competitors. 

The company said later that month it would cut its planned $400 million investment in Kenya this year if its position was restricted.

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