CCK denies approving price fixing

GOVERNMENT

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Image: Francis Wangusi. By BiztechAfrica
Francis Wangusi

Kenya’s regulator has set the record straight on reports that it gave tacit approval to mobile price fixing.

In a statement issued by Francis W. Wangusi, Ag. Director-General of the Communications Commission of Kenya (CCK), the organisation said no official authorisation had been sought or granted for mobile operators to fix prices for cross-network calls.

The CCK said: “While the CCK recently held discussions with some licensees regarding the wholesale interconnection rate and the attendant glide path, no request has been officially made regarding the intention to fix the retail mobile voice tariff either by those players on any other licensee. As such, no such approval has been granted.”

“Retail price fixing as practiced in collusive oligopoly markets is an anti-competitive business practice that is contrary to the prevailing competition law and policy. Retail price fixing in the mobile voice market in Kenya would, therefore, be in breach of the law; and as such no approval can be granted.”

The statement said CCK considered the retail mobile voice market as sufficiently competitive, thus making it unnecessary to impose any stringent retail price regulatory obligations on the licensed mobile operators.  However, even for such competitive market segments where the Commission does not impose retail price setting obligations, the law (i.e. clause 4(3) of the Kenya Information and Communications (Tariff) Regulations, 2010,) prohibits licensees from applying tariffs that distort competition, exploit consumers and, possibly even prevent market entry.

“Therefore, all mobile operators set their retail prices independently guided primarily by their costs of providing a particular service and are only obligated to file with the Commission their retail rates as provided for in their respective licences.”

The statement concluded that the Commission is currently carrying out a study to evaluate the impact of competition on the mobile voice market on the entire economy.  “We would like to clarify that the study, which is being undertaken by the Kenya Institute of Public Policy Research and Analysis (KIPPRA), is in not in any way meant to determine interconnection rates for the mobile telecoms market.” 



Business Process Outsourcing - April 27, 2012, 9:12 a.m.

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