Be Ware of anti-competitive behavior: CAK tells Telecommunication Companies

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Telecommunication companies with anti-competitive behavior in providing mobile banking services to financial institutions risk high penalties following a launch by the Competition Authority of Kenya to investigate service provider tariffs structured for financial institutions.

Today, financial institutions; Banks, Microfinance as well as insurance companies have opted the use of mobile phone services as an alternative medium of communication to customers which has a high reach in comparison to other channels. Unstructured Supplementary Service Data (USSD) provided by telecommunication companies is the most common among the institutions. This has enabled Customers to easily access bank details and services real time at the comfort of their homes and offices .

The launched investigation is aimed at establishing different standards set by the telcos in providing the communication channels and in the same breathe find out if the pricing of USSD services is contributing to constrained competition in the financial services market which may have put consumer protection at stake.

Given the rapid pace of developments in the area of mobile finance, Customers today receive low cost financial services via their mobile devices. The use of personal gadgets to perform banking transactions has seen as increase over the past few quarters. As of this last quarter of 2014, Kenya was crowned king of mobile banking with 93 per cent of consumers using their mobile device to perform banking transactions.

The competition Authority will conduct a market inquiry to screen the pricing formulas by the telecommunication companies in conjunction with related firms and parties. This will include price fixing and market zoning which has resulted to competition limits at the expense of consumers.

In the present day, the gap between banks remains wide due to the different interest, deposits and loan rates which is because of completely different tariff structure which ends up biting into the consumers pocket. The competition Authority is on a mission to make it possible for customers to easily move banks and financial institutions without having to strain financially.

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Winfred Kuria
Winfred Kuria is a self-constituted web content writer in charge of Tech News and Events Publicity at Kachwanya.com. She will communicate in the simplest way possible with an aim of changing the world one mind at a time.
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