#mwc2017: Michael Joseph on the Market Dominance War


ICT regulators should not seek to come up with laws that penalize companies and organizations for being successful through transparency and rightful procedures.

This was said by Michael Joseph, Vodafone Group Services Limited as the Director of Mobile Money and who is the founding CEO of Safaricom Limited and currently a Board Member.

Giving his keynote address at The Mobile World Congress 2017, in Barcelona Spain, on Accelerating Universal Financial Access, Michael Joseph touched on the success story of M-PESA and how the mobile money industry has disrupted the financial services sector as the world marked a decade in mobile money.

On a side interview though, he touched on the regulatory aspect of the country that might end up crippling the innovation side of Companies, “Why should you penalize a company for being dominant? You should penalize one for abusing dominance.”

“Is it because of our voice prices? If you look at our voice prices, we could level our voice prices but we will suffer a few revenue losses and we would easily kill our competition but we have never done that. The same as mobile money, people pay for transactions but we still dominate the market we are just being successful because we made the right investments,” he added.

He further added that, ”We invested in 3G when everyone else said there is no business for 3G in Kenya, I remember that because I was there, the same with 4G. We are making the right investments therefore we should benefit from these investments. We are just doing the right things for the market and we should not be punished for that. I just think it is unfair.”

The war on dominance started last year when The Communications Authority of Kenya (CA) came up with a set of regulations, that sort to penalize any organization that was found to abuse its dominance in the sector.

CA later on hired consultants as part of its effort to find an appropriate legal framework for regulating abuse of market dominance and anti-competitive behaviour that began in 2010. The outcome of the telecoms study was informed by formulation of new competititpn regulations and a market of three players.

Given the market concentration force it has had in the market and its success as a player in the financial services market, mobile money business, dominated by M-Pesa, has been of particular interest to telecommunication sector regulator.

Though the proposals by the consultants are still far from being implemented, Michael Joseph, pointed out that there was no need for the regulator to hire an organization to carry out a dominance report which will still prove what they already know.

“Yes, you can investigate and look at what we do but if we play fair and do things transparently then we shouldn’t be penalized. There was no need in the first place to hire a consultant to prove we are dominant, of course we are dominant, everybody knows that we have 85 % market share and 75% market share by revenue. The consultant will just give you the same report that you do not agree with and of course we never see the report,” he added.

“What the regulator should tell us is what they want and what we are doing wrong as a company. If they want us to put a cap on our prices,” he added “If they want us to break into three companies, then that will make us three big companies. We should not force a company to do what they are not willing to do.”

Michael, was the founding CEO of Safaricom Limited, steering the company from a subscriber base of less than 18,000 in 2000 to over 17 million subscribers at his retirement in November 2010 making it the most successful company in East Africa.

This phenomenal growth straddling nearly a decade was notable for the launch of many innovative products and services and he was behind the launch of the highly successful launch and phenomenal growth of M-Pesa and its related services.

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