• The Analysys Mason findings have not been empirically discounted and can be a solid, defensible basis for corrective action in the sub-sector.
• Firm located significant dominance in two segments of the market: mobile telephony and mobile money, with one telco controlling market share way above the global threshold.
With the recent adoption of a report by Parliament’s Departmental Committee on Communication, Information and Innovation, the quest for a truly competitive telecommunications sub-sector has received a significant setback.
The committee’s intervention in the industry was motivated by what it framed as a need to inquire into the legislative and regulatory gaps affecting competition, with a view to proposing necessary amendments to existing legislation and regulations.
But its report, which was adopted by the House with just a single amendment early this month, would appear to have set Kenya at least two years back on the path towards a competitive telecommunications industry.
The report’s centrepiece recommendation was for a study to get a better understanding of the sub-sector, with a view to using the results to prescribe the most appropriate regulatory and legislative measures for its optimal performance and, most importantly, the protection of consumer interest.
But is this perceived paucity of bankable data and knowledge on the industry by Parliament the biggest challenge facing the sub-sector, as the committee would want the public to believe?
It is perhaps the apparent inability by CA to provide leadership on the post-Analysys Mason report dispensation that has invited other “quasi-regulators” to what should purely be a CA mandate.
Nothing could be further from the truth, if recent history is anything to go by.
In 2016, the Communication Authority of Kenya commissioned British consultancy Analysys Mason to undertake a comprehensive study on the industry. In specific terms, the brief was for the firm to carry out a competition study of the telecommunications sub-sector with a view to evaluating the competitive landscape of the market. This was done between May 24, 2016, and February 2, 2017.
According to the CA, “the study was meant to foster a competitive telecoms market, which can attract sustainable investments, provide more choices to consumers and improve consumer welfare through the provision of affordable, high-quality services.”
In its report dated March 20, 2017, Analysys Mason located significant dominance in two segments of the market: mobile telephony and mobile money, with one telco controlling market share way above the global threshold.
Most significantly, the report suggested specific remedial measures to cure the effects of dominance and eliminate barriers to entry in the sub-sector. These include agent inter-operability in the MFS (mobile financial services) space. There was also a suggestion that the dominant player allows other operators to roam on its network in identified counties for regulated tower sharing.
What followed was a ping pong game, punctuated by delays and confusion. For instance, the mandatory Stakeholders’ Dissemination Forum, which is now a fixture in any public policy process thanks to the Constitution 2010, happened after two inexplicable postponements.
It is perhaps the apparent inability by CA to provide leadership on the post-Analysys Mason report dispensation that has invited other “quasi-regulators” to what should purely be a CA mandate.
First, there was the CA, which has been animated by the process and some aspects of it, especially the interpretation and determination of market dominance.
Parliament’s Departmental Committee on Communication, Information and Innovation, chaired by Marakwet West MP William Kisang’, is the latest to latch onto the issue, albeit while professing a wider mandate.
Back to the Analysys Mason report, while some of the data that informed it may have moved during the intervening period, nothing has shifted fundamentally as to render it null at this point and compel the need for a fresh study. The parliamentary committee report stops at prescribing a new study, without providing a rationale or justification for it.
On a global scale, the issue also brings into sharp focus the capacity of parliamentary committees to competently deliberate on and prescribe regulatory solutions in admittedly technical areas like telecoms regulation.
There is also mounting concern that parliamentary committee processes, besides the huge taxpayer payload they come with, can potentially be captured, abused and even instrumentalised to achieve a certain end-game.
The parliamentary committee report, if implemented by the regulator, will have the effect of postponing corrective action in the sector, pending the investment of taxpayer funds in yet another study, which the committee says should be done in the next 12 months.
This despite the existence of the Analysys Mason study, whose findings have not been empirically discounted, and which can be a solid, defensible basis for corrective action in the sub-sector.
The time has come for CA to pick up the gauntlet and deliver on its mandate.
Former Business Editor at a daily and telco employee, is a strategic communication consultant