Safaricom ordered to open M-Pesa platform

JULY 30,2014.

KBC

The telecom industry in Kenya is headed for a major re-alignment following an order to Safaricom to open up her mobile money platform.

The ruling by the Competition Authority of Kenya however fell short of ordering Safaricom to cut fees charged on sending cash to other networks.

Airtel Kenya had also petitioned the Competition Authority of Kenya to compel Safaricom to reduce the cost of sending money from M-Pesa to other networks.

However CAK deferred the issue to the Central Bank of Kenya and the Communications Authority of Kenya.

Safaricom which pioneered mobile money technology in Kenya in 2007 has fought many legal battles to maintain a firm grip on the technology.

The telcom company which controls close to 70 percent of the mobile commerce in Kenya does not allow her M-Pesa agents to operate other mobile money services like Airtel money and Yu money.

Safaricom also charges higher fees to send money off her network which other players deem to be anti-competitive.

Airtel money which operates the second biggest mobile money platform in Kenya had petitioned the Competition Authority of Kenya to investigate Safaricom for alleged abuse of its position as the market leader in M-commerce in Kenya.

Airtel Kenya had said that Safaricom’s charges to its customers when sending money to Airtel Money accounts was double the amount of that required for Safaricom-to-Safaricom transactions. Airtel Kenya also wanted Safaricom to allow M-pesa agents to deal with other agents like Yu money, Airtel money and Mobikash.

On Friday the Communications Authority of Kenya ordered Safaricom to allow its mobile money agents to also operate other platforms.

The Authority however failed to order Safaricom to lower Mpesa tariffs to other networks saying the issues should be handled by Central Bank of Kenya and the Communications Authority of Kenya.

This brings to an end a long battle between Airtel Kenya and Safaricom over exclusivity of the service, which barred M-Pesa agents from engaging in business with other mobile operators.

A letter signed by the Competition Authority of Kenya, and sent to Safaricom and Airtel on Friday last week ordered Safaricom to effect the directive.