Our 5th topical note “Safaricom dominant. Fact or fiction?” focuses on Safaricom Plc’s “Safaricom” market positioning in the Kenya telecommunications industry and specifically covers the area of market dominance.
We intend to determine whether Safaricom is indeed dominant or is perceived as the dominant player by the regulator the Communications Authority (CA), its competitors and customers.
Our report first gives a brief description of the concept of market dominance according to the Competition Authority of Kenya (CAK).
The theoretical market concept of market concentration the Herfindahl Hirschman Index (HHI) is also used to capture evidence of Safaricom’s market dominance.
Using HHI, we see that Safaricom enjoys a significant dominant market position compared to its peers in selected countries on the continent.
The CAK clearly states that there is nothing wrong with market dominance but prohibits its abuse and gives instances where an industry player’s business actions translate to abuse of dominance.
Our report identifies few examples of cases of abuse of dominance.
Finally our report refers to some of the proposals made by Analysys Mason an independent consultant commissioned by the Communications Authority (CA) to analyze the Kenya telecommunications industry.
The proposals, reasons behind them, the potential impact and the likelihood of implementation are covered.
Our report concludes that most of the proposals made by Analysys Mason are unlikely to be implemented and Safaricom will remain dominant in the industry for the foreseeable future even with its market share declining. Download Report