Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: Press Releases: Zain Accuse Safaricom of Sabotaging its New Price Offer

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Kenya: Press Releases: Zain Accuse Safaricom of Sabotaging its New Price Offer

Thursday, 19 August 2010

Nairobi, 19 August 2010 --- Just a day after launching the industry-shaking low cross-network charges, Zain Kenya is accusing competitor Safaricom of sabotage. The company has written to the Communications Commission of Kenya, asking the regulator to stop Safaricom from “abusing dominance” by offering only limited capacity for cross network calls coming from the Zain network.

“Our customers are experiencing congestion and call set up issues when they call Safaricom and not when calling Zain. This is purely for the simple reason that our main competitor has been delaying the capacity increase request from our side to accommodate the incremental traffic coming from us after we launched our new offer in the market,” said Mr. Rene Meza, Zain Kenya Managing Director.

Mr. Meza said despite having made requests to Safaricom, their competitor had remained uncooperative. “We requested Safaricom through the agreed contact persons for the reconfiguration of the points of interconnection to accommodate increased traffic going from Zain to Safaricom to accommodate our new tariff offer to customers. We simply requested for a swap out of some circuits from the Safaricom to Zain link to the Zain to Safaricom link. In our experience such a request can be accommodated in a matter of minutes and at no cost. Much to our surprise, we could not get a commitment from Safaricom as to when the configuration would take place,” he said.

Mr. Meza said the continued delay was affecting the quality of service and was also denying customers an opportunity to take full advantage of the new price offering on calls to any network in Kenya, and in this particular case when calling Safaricom. “This is a clear sign of abuse of dominance where customers are being penalized for choosing a much better value proposition. This leads us to conclude that Safaricom is deliberately trying to frustrate our customers by making the experience of calling Safaricom unpleasant. Such behavior is in our view also anti competition and is intended to stifle competition,” he said.

Following the 50% cut in cross network rates yesterday, traffic from Zain to other networks is expected to rise steeply. The company says the new pricing model is part of its strategy in its “new journey towards market leadership”. Mr. Meza said the delay by Safaricom in “expanding” the route to accommodate the incremental traffic from Zain customers will not stop Zain’s quest in attaining the market leadership position.

Zain Kenya is now imploring the regulator to invoke Kenya Communications and Information (Fair Competition and Equality of Treatment) Regulations, and declare Safaricom a dominant operator in order to check against anti-competition tendencies. “In view of Safaricom’s dominance in the retail voice market and monopoly of its own network, they should be subjected to the much needed regulatory oversight which we believe will instill discipline and safeguard the telecoms market from anti-competitive behavior and protect consumers from erosion of their welfare,” said Mr. Meza.

Zain Kenya yesterday lowered its calling charges across all networks to KES3 and KES1 for SMS becoming the first mobile phone company in the country to pass to customers the benefit of the new low interconnect charges released by the Communication Commission of Kenya.

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