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Opinion

OPINION: Regulate Safaricom before it’s too big to control

Safaricom Plc CEO Peter Ndegwa

The first step to Tyranny is letting big companies like Safaricom overun the government. This will most importantly hurt democracy and the government will fail in its efforts to advocate for the peoples’ best interests and instead become a puppet to this giants when they become too big and powerful for them to control or regulate.

But how are such companies in the verge of becoming big and too powerful for the government to control?

Just like in Sylicon Valley,Westlands in Nairobi sits as the home of the telco giant SafaricomPLC. The company’s grip on the market has become a menace with the company making it difficult for competitors to thrive in the market. In 2021 alone Safaricom saw its net profit (excluding Ethiopia) rebound to pre-Covid-19 levels, growing by 12.2 per cent to Sh77 billion in the full year ended December 2021. The telco’s mobile money platform M-Pesa continued to be the firm’s cash cow earning Sh107 billion and  the company’s net value being the north of Sh 260 billion while its main competitor Airtel Kenya mobile money business made a profit of only Sh79 million in the year ended December 2020 and posted its highest loss in history in the financial year ended March 31, 2021, having halved the loss to Sh2.78 billion in 2019.

Safaricom has been accused of abusng the market and makeing it difficult to compete against. In 2015 yumobile sold to the giant stating they it was difficult to compete against. Its grip on the market has been characterised by aquisition of potential competitor suppressing ideas or developing them for their own benefit.

Former cabinet minister Fred Matiangi proposed that the company be divided into three different entities in order  to facilitate fair competition but the proposal didn’t do past the proposal stage as the then AG Githu Mwigai wrote to Matiangi and his friends in the cabinate to withdraw the proposal.

Safaricom has a legal and PR  team larger than Kisumu’s county assembly and spends alot of money on lobbyists groups to further its agenda. Any lawsuit or proposals that could potentially result in loses or the telco giant loosing its grip on the market is swiftly dealt with.

Safaricom’s hand in the justice department was also seen when the court of appeal suspended a high court decision compelling Safaricom to pay five dealers  Sh 372.5 million after terminting a distribution deal a decade ago on claims of fraud. The three judge bench agreed with Safaricom claiming that the money involved was huge and recovering it would be very difficult even after High court Judge Alfred Mabaye ruled that Safaricom had wrongfully terminated the agreements in 2011

In 2008 Safaricom refused to name its major shareholders. The reports caused a stir which led to the summoning of its CEO Michael Joseph to appear before the PIC “Public Investment Committee”, where he denied knowing who the other shareholder is. A spokesman for Vodafone said “the PIC has no powers to investigate M&A activity

In a case of copyright infringement, A Kenyan artist sued Safaricom for using his music in their skiza tune platform without his concent. How long did the case take? Be my guest. 7 years and the artist remains uncompensated to date.

Safaricom’s influence in the country is so big and has been accused multipe times of influencing Elections. In 2017 Raila Odinga had accused Safaricom of committing electoral malpractice during the results transmission. Both operators along with Telkom Kenya were hired to provide connectivity between polling stations and the electoral commission’s national tallying center in the Aug. 8 elections. But during the repeat vote, Safaricom was retained to transmit most of the poll results.

In other instances the the telco giant had been accused of spying for the government and others renaming it as the national intelligence service wing of the country. A government cannot spy on its citizens without a warrant and probable course. This should warrant an investigation in the company’s conduct and violation of fundamental rights to privacy. Police have also aquired private data on private citizens without court orders in the name of conducting investigation.

In a law suit, Safaricom employees a have also been accused of leaking private data and information and aiding fraud and criminal activities exposing customers to untold risks due to information leaked by its rogue employees. Safaricom through its law enforcement manager asked the courts to dismiss the matter claiming its terms and conditions on mpesa balance and PIN numbers are matters of extreme privacy even though we know its not.

Leaving companies like Safaricom do what they want is a threat to sovereignty. With the little kick backs they give back to society like building schools,does not warrant them to abuse the market,hold justice by its neck and suppress its competitors. Safaricom should be held acountable  for its miss dids,investigated for its conduct in electoral malpractice and private policy  violations. Regulations on fair competition should be enforced and the proposal to divide Safaricom into three entities is the only way to regulate the telco giant. Before it grows too big and powerful to regulate. Just like Apple,Alphabet and Amazon have  overrun the United Stated States government,our sovereignty will be up for sale if we don’t act swiftly.

Bob Sarowiwa Ombede
Observer of politics,governance and economics


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