We welcome the points by King’ori Choto, a lawyer and a public affairs expert, but wish to debunk some mistruths and assumptions in the article.
His article, headlined “Involve consumers in ICT reforms”, appeared on Page 17 of the Daily Nation on Thursday February 1. Though well timed, it has some fatal conceptual flows. Wallet-to-wallet interoperability growth has been phenomenal. Various operators have attached importance to it based on their corporate strategies. Some invested more to develop a solid, even globally innovative, network, while others adopted a wait-and-see attitude.
The local mobile payments ecosystem is quite diverse. It has players and solution providers across the board. It’s wider than MNOs as it also features solution providers, such as Interswitch, Cellulant, Integrated Payments Solutions Limited, and others. Indeed innovation is the only differentiator.
Like any other sector, including banking, interoperability always needs a mediator or clearinghouse. That aspect will need to be technically dealt with to avoid a single operator carrying this risk.
Policy reforms must also be crosscutting and focused on posterity. Policy reforms should not be used as the last-resort competition tool. You cannot apply policy reforms to penalize market leaders and reward poor performers.
In alluding to decision-making relating to the dominance question, the regulator has been clear that a stakeholders’ workshop is set for February 20th. The workshop shall then inform the final release of the report by ensuring that stakeholder concerns are addressed.
The idea that wallet-to-wallet interoperability will foster competition is also unfounded. Such interoperability in the banking sector has really not been the defining factor for competition. It is more about exceptional customer experience, depth of value added services, and, above all, trust. “Structural barriers to entry in the telecoms industry” is hollow statement, loud and vacant. The Kenyan telecoms market is perhaps one of the most advanced, with an effective and independent regulator in the Communications Authority. The argument here can be turned upside down, given that a key victim on this front would be is players that have over the years invested in building their capacity. And at high prices, literally, to secure licenses. On the flipside, several other players have joined the market on heavily discounted license rates. That is information in the public domain and the players are known. The polysyllabic 16-letter word “interoperability” is ugly and not an easy headline word in media. Something else should be used, even “compatibility” is better, or “cross-platform” cash transfers. To have the social license to operate and build a client base, nurture trustworthiness is an attribute that takes years of excellence, service and innovation. Global management consulting and professional services company Accenture PLC, a Fortune 500 company, says in its DIGITAL TRUST: ERASE THE TRUST PARADOX IN BANKING report, subtitled “Learn how banks can use data and digital technologies to enhance transactional banking and grow relationship trust”: “Eighty-four percent of bank executives agree that trust is the cornerstone of the digital economy.”
Penalising market leaders that are indubitably head and shoulders above all other would-be competitors, to reward perennial underperformers would be a gigantic injustice. It should be avoided at all costs for it would endanger the quality and assurance of world-class services and a track record that will take generations to match, much less surpass.
Being the best is something that everyone should acknowledge and live with, without losing your own ambitions to be better all the time. It is to be hoped that one thing the stakeholders will takeaway from the February 20th event is being an outstanding market leader is like being at the top – lonely. The air is rarefied at the top of the summit.
We should avoid accusations of surpassing excellence and market leadership as dominance. Competition does not mean that all contenders start at the same place.
From a customer point of view, cross-platform cash transfers are definitely the near future and the sooner it happens the better. Market leadership is not at all a bad thing. One of the most concise definitions of a market leader comes from the Economic Times of India:“A market leader could be a product, brand, company, organization, group name which has the highest percentage of total sales revenue of a particular market. Market leader dominates the market by influencing the customer loyalty towards it, distribution, pricing, etc.” Let us develop Kenya’s market leaders in all sectors as the 21st Century really gets going.