Heated debate over a controversial telecoms report commissioned by the Communications Authority on market dominance was one of the key highlights of Kenya's telco industry this year.
The detailed study,carried out by London firm Analysys Mason had some policy recommending that market leader Safaricom share its infrastructure with rivals.
Besides it would see the telco be split into two and Mpesa services hived off as a separate independent entity.
In 2016, the Treasury warned that collapse of mobile money service M-Pesa could cause widespread disruption of the economy.
While the mobile money platform has never collapsed, frequent outages due to maintenance has seen the debate as to whether Safaricom is a dominant player in Kenya’s telecoms market that requires extra regulatory action renewed.
Early this month, M-Pesa experienced the latest outage estimated to have cost the economy billions of shillings.
The outage which lasted for over three hours saw ICT Cs Joe Mucheru order CA to work with Central Bank to establish its course and submit a report on the same.
CA data show that at least Sh1.5 trillion was moved through the M-Pesa platform in the three months to June, translating to an average Sh16.3 billion per day or about Sh679.3 million every hour.
M-Pesa agents were among the biggest losers in the blackout that stalled their business for hours. Multiple banks have hooked up their systems to M-Pesa.
The Sh1.5 trillion accounted for 79 percent of overall mobile money transfer in the quarter to June.
MOBILE INTEROPERABILITY
To ease the risk, Cs Mucheru asked consumers to move their money through different mobile service providers and take advantage of mobile interoperability.
However, a keen look at mobile money services across the three service providers shows that the cross-network transfer has seen little improvement in the seamlessness of transactions
Safaricom users are still charged four times more to send money to Airtel users compared to the same transaction made to M-Pesa subscribers.
Mobile money interoperability switch is part of recommendations Analysys Mason.
According to CA director general Francis Wangusi, there are plans to launch a common mobile money wallet next year that would lead to full interoperability between service providers.
The system, according to Wangusi, will allow seamless transactions between users, will be owned and managed by the CA .
Other recommendations required dominant players to introduce standard call rates for on-net and off-net calls or messaging through their tariffs , and introduction of promotions or permanent loyalty schemes that can profitably be replicated by efficient competitors.
According to CA, the study by Analysys Mason conducted from May 2016 was conducted to establish the degree of competition among telecommunications firms with the aim of creating a level playing field.
Besides , the regulator insists that the study is meant to foster a competitive telecommunications market, which can attract sustainable investments.
This is in addition to providing more choices to consumers and increase consumer welfare through the provision of affordable high quality services.
MARKET EXIT
Airtel and Telkom have over the years accused Safaricom of occupying a dominant position that has tilted the playing field in its favour.
Months after the public debate over the report was held, the regulator is yet to give its clear stand on whether it will adopt all or part of the recommendations of the report.
In March this year, CA director general Francis Wangusi said the organisation is waiting for the conclusion of the recommendations that should be out in a month.
At the same time, Telkom Kenya has raised concerns small players in the telco industry will be forced to shut down if recommendations of a competition study are not implemented.
“Unless findings of the competition study are implemented, small players, who have brought competition and the dynamism into the market, will have no choice but close shop as they cannot continue to invest in a business without returns,” Telkom Chairman Eddy Njoroge said.
While Safaricom finds some of the recommendations of the study unpleasant, Njoroge expressed hope the regulator will consider the long-term interest of the industry and implement suggestions without fear or favour.
Currently, Safaricom has nearly six times as many agents as its competitors while its M-Pesa agents account for about 70 per cent of all mobile agents in the country.
NEW TAXES
Also a highlight of the year is the introduction of 5 per cent excise duty on telephone and Internet services as included in the Finance Act 2018.
This is besides a 2 per cent increase on mobile money transfers to 12 per cent.
The taxes, proposed by President Uhuru Kenyatta in efforts to collect more revenue to pay the increasing debt saw the cost of voice calls and Mpesa transactions go up.
To reflect the new law , Safaricom increased the cost of calls by 30 cents, and SMS by 10 cents.
Additionally, prices for mobile data bundles, fibre to the building and fibre to the home went up by five per cent.
Airtel and Telkom Kenya also increased their voice call and SMS charges by 30 cents and 10 cents respectively five days after Kenya's Safaricom raised its costs.
While the new taxes are here to stay, the mobile telco chiefs noted that it would discourage the drive towards modern payments systems.
Besides, CA is yet to give an update on whether it will adopt the dominance report or not. If it does then we can only get ready for a more competitive sector in 2019.