Mobile service providers should invest in good infrastructure and stop focusing on big numbers in order to compete effectively against Safaricom, CEO Bob Collymore has advised.

Collymore, who faced Parliament’s Communication committee on Monday, noted that their big network-success had been the result of annual investments which have led to good coverage across the country.

“If you invest you are likely to get the customers, whom you are crying you don’t have today, simply because you have not [laid] the infrastructure for them to use,” he said.

“If they [invest] they may actually be shocked to see see a change in market structure,” he continued, but adding big numbers then translate into base stations, fibre connectivity and more services.

The chief executive resumed work today after a nine-month break at a time when the firm is grappling with SIM swap fraud. He left the company on sick leave in October last year and flew to London for treatment.

Read: Collymore returns from sick leave to Safaricom SIM swap storm

Regarding prices proposed by the Communication Authority of Kenya, Collymore noted unfairness to Safaricom’s customers and investments.

The report recommended several measures aimed at preventing abuse of dominance. They include retail price interventions, Mobile Termination Rates (MTR), tower sharing and national roaming

Airtel, the second largest operator, and Telkom, the third, welcomed the proposal to regulate tariffs but Safaricom warned that the move could be counterproductive as it could lead to an increase in calling rates.

Safaricom likened the move to asking it to return to its headline rate which will make it appear to be more expensive and force customers to migrate.

“That is not competition; that is tying someone’s hand and telling them to go and play in the same field as those who have both hands,” he said.

On M-Pesa services, the firm said it gave exclusivity to all mobile money agents in Kenya over four years ago.

“At that time, we had over 88,000 M-Pesa agents. Today we have 150,000,” the CEO noted, adding Safaricom incurred recruitment and training costs.

“We provide insurance and security for them. That is a lot in costs,” he said, adding its competitors do not want to the cost of employing Kenyans but to plough through what Safaricom has.

“We said ‘okay’ but now we are hearing that they want to have access to Safaricom’s float so that their customers can take money from M-Pesa,” he said. 

The CEO pointed out that such “never happens in any business, not even with big merchants like MasterCard, Swift Global and Western Union”.

“Someone does not want to take up that cost … they want to under-ride that cost,” he added.

Collymore further noted that the implementation of the proposal would be “incredibly complex” as it would take the firms back to the check system where money back-ups have to be confirmed for the checks.

“It would be incredibly complex and expensive and the costs would go to the consumer, ” he said.

He explained further that M-Pesa is backed by cash and that if a third party takes the money out of circulation “because they have to get their customers’ money honoured by M-Pesa”, there would be an imbalance between actual cash and virtual money.

Collymore also said this is a territory that has not been tested and which is being suggested for the convenience of competitors who are not prepared to roll out their agents network.

“Now they want us to roll out the network and also fund their customers,” he said, adding that allowing networks to do national roaming on its network means the absence of other mobile operators in the market because they don’t invest.

More on this: Consumers to win big if CA adopts competition study findings

Related: Remove extra charges for mobile money users – state

Collymore noted that the M-Pesa service was approved by Central Bank, as it resembled an overnight lending system, and that national roaming will force the firm to carry traffic for its competitors.

“Why are we carrying their traffic? I means they do not have investments in those particular areas. They should be obligated to [invest].”

Collymore also said they don’t prescribe MTR rates as they are determined by the regulator for all operators to apply uniformly. He noted that Kenya is one of the most advanced countries in which there is a single MTR for mobile money services and fixed services.

“There is a cost element to delivering a call from one network to another network. If we wish away that cost, we will find a place for the charge; it will be [to the customer’s disadvantage].”

“Switching does not happen for free you have to pay a spectrum fee, and switching costs. That cost will be hidden to the customer,” he added.

Collymore pointed out that in countries such as China and parts of America, applying the zero MTR means that when someone calls, the receiver bears the charges.

He added that county governments should also appreciate the firm for making their work easier by delivering good services.

Other details: M-Pesa maintains top slot of mobile money space

Also see: Mobile money interoperability

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