Authorities proposes law for phone companies to share networks

January 8, 2016 1:37 PM

"Without them (such laws), then people can't invest. If someone wants to put up a data centre in this country, how can they without data protection laws?" he said.

Kenyans line up outside a Safaricom building in a file photo. REUTERS/Antony Njuguna

Kenya's government is preparing a bill which would make mobile operators share their infrastructure to boost competition, the country's minister for information and communication said.

Minister Joseph Mucheru, who until his appointment last month was a senior executive at Google Africa, told Reuters he wanted the law on sharing infrastructure to be in place within six months.

"I have no control over parliament but if it were my choice I would have them ready today," he said in an interview on Thursday.

Safaricom, 40 percent owned by Britain's Vodafone, is the biggest phone company in the country with about 67 percent of subscribers.

Rivals such as the Kenyan subsidiary of India's Bharti Airtel say Safaricom's huge slice of overall revenues is driving out competitors.

Safaricom has rejected claims it is a dominant player and says any measures designed to reduce its position would discourage investment in the industry.

Mucheru said the government was also preparing bills on access to information and data protection in a bid to attract more investors.

Parliament is dominated by President Uhuru Kenyatta's ruling coalition, so bills proposed by the government are likely to be passed.

Mucheru dismissed concerns about the size of Safaricom in the market, noting it was Kenya's largest listed firm by market capitalisation and delivered the biggest profits, but was still not in Africa's top 10 telecom companies.

"We are trying to grow our economy and if we are going to do that, we cannot be saying a $6 billion company is too big," Mucheru said.

Safaricom, which pioneered the popular mobile money transfer service M-PESA, has already opened up its distribution network to rivals to even the field, the minister said.

He said the proposed law details how telecom companies will share infrastructure such as base stations, adding: "Shared infrastructure will help competition."

Africa-focused private equity firm Helios is expected to conclude its purchase of Orange's stake in Telkom Kenya, the former state-owned telecom monopoly, this year.

Orange is leaving the Kenyan market after losing money on its 70 percent stake in Telkom, which it bought in 2007 for $390 million.

Equity Bank launched a new service called Equitel last year to take on Safaricom in the lucrative mobile financial services business.

Officials want the information communication technology sector to contribute 8 percent of the country's economic output by next year, up from 1.2 percent now, Mucheru said.