Kenya: Minister opposes regulators break up Vodafone unit

Kenya’s government opposes using regulations to force East Africa’s biggest mobile operator Safaricom to be broken up, after a draft study found the company is dominant in the country’s telecommunications industry, Information, Communications and Technology Secretary Joseph Mucheru said.

The government disapproves of measures that would stifle innovation as it wants companies to expand by investing in new products and technology, Mucheru said in an interview Friday in the capital, Nairobi. The country had existing laws that could be used to stimulate competition without having to introduce new regulations, he said.

A draft report by UK advisory group Analysys Mason commissioned by Kenya’s regulatory Communications Authority found that Safaricom was a dominant player in the mobile-money and mobile communications sectors and recommended that, unless steps were taken to improve competition, the company should be broken up. Analysys Mason declined to comment, referring all queries to the regulator, which said it was reviewing the study as it considered steps to enable Safaricom’s rivals to compete better. Safaricom is 40% owned by England-based Vodafone.

“As the government, we do not support regulation that splits companies based on innovation,” Mucheru said. “To say that any company that innovates something — they are likely to be penalised by law — I believe, is unfair.”

Full Content: Business Live

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.