Concerns about size of Kenya’s telco giant Safaricom

5/15/2018 8:22:53 AM

Kenya’s largest telecom operator Safaricom is also the largest enterprise – by market capitalization – in the country. It has a 72% mobile market share, which is almost five times the number of its closest competitor. In Kenya, concerns have been raised that the firm has become too large and should spin-off some of its activities.

The company, owned by the UK’s Vodafone Group and Kenya’s government, is much bigger than its competitors, in subscribers, revenue, and infrastructure. Quartz reports that questions have been raised about the size of the firm. Some say that a smaller Safaricom would help the government create a market that attracts sustainable investment, facilitate the growth of smaller operators, and ultimately give consumers more choice through competitive and high-quality services.

One year ago, a consultancy firm report recommended the government look into breaking up the dominant mobile operator Safaricom by spinning off M-Pesa, Safaricom’s dominant mobile money service. Today it does not look like the Kenyan telecom regulator will take such a step, as there is much discussion. Safaricom has insisted that steps like this would be a punishment for Safaricom’s success.

Further reading on qz.com

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