Airtel renews M-Pesa agents battle with Safaricom

Airtel Kenya has renewed its battle with Safaricom over the sharing of mobile money agents. Airtel, through its lawyers Mukite Musangi Advocates, has written to Safaricom accusing it of coercing its mobile money transfer agents to remove Airtel branding from their shops and stop offering Airtel Money services failure to which they would have their M-Pesa tills disconnected

The move, according to Airtel is against a settlement the two firms had with the Competition Authority of Kenya (CAK) on July 18, 2014 removing exclusivity of the M-Pesa agents and allowing them to offer rivals’ services.

Airtel claims that despite several assurances from Safaricom that it was investigating the matter, the defacing of Airtel’s branding has continued unabated and restrictions remain on M-Pesa agents offering services for rival firms. Safaricom has however denied these allegations, insisting that it has not instructed any agent to deface or remove Airtel’s logo from any premises.

The negotiated settlement agreement meant that investors could now run M-Pesa services with those of its rivals such as Airtel Money and Orange Money (from Telkom Kenya) in the same premises.
Airtel said that Safaricom’s “conduct (the removal of Airtel money branding) would only serve to aggravate an existing dispute in court and could in fact very well lead to the emergence of additional litigation.”

Opening up of M-Pesa outlets to rival mobile money products was seen as a big win for Airtel, which had been pushing for integration of mobile money services at the distribution and technological level to encourage competition.

Ending the restrictions also meant that agents would earn more in commissions riding on Safaricom’s subscriber base.

The competitive market landscape saw Airtel file a petition with the Competition Authority of Kenya (CAK) in 2012, asking the regulator to compel Safaricom to open up its agency network.

Airtel also wanted Safaricom’s pricing of its M-Pesa services investigated; arguing that its hire charges for money transfers to and from rival platforms is anti-competitive. Airtel argues that since Safaricom’s mobile money agents account for about 88 per cent of the entire telecoms industry, most transactions take place on its network denying Kenyans choice by charging those outside its network double the costs.
The push by Airtel comes as the industry regulator is preparing to hire an international firm that will examine Kenya’s telecommunication and broadcasting sectors for market dominance and anti-competitive behaviour.

The consultant’s brief also includes review of existing policy, legal and regulatory frameworks on competition, recommending appropriate changes to enhance effectiveness as well as give remedies for issues identified.

The CA says the consultant’s report is expected to offer insights into the market status and facilitate decision-making in prescribing proportionate and appropriate regulatory actions.

It adds that independent research will assist the authority in identifying and developing the key market interventions necessary to facilitate continued growth and economic efficiency in the sector, while promoting sustainable investments, access and affordability.

The consultant is also required to propose the best ways by which the identified barriers and factors considered a hindrance to growth can be minimized or eliminated.

It is also expected to come up with specific stimulus that can be injected in the Internet/data sub-segment to ensure effective competition, accessibility, affordability and growth.


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