CAK Clears Airtel Tower Deal Following Investigation

Sometimes back, Airtel Kenya was on the country’s telecoms sector watchdog following a complaint lodged against its deal with a rival tower provider sighting unfair business practices. The Competition Authority of Kenya (CAK) has finally concluded its probe into a complaint lodged by Atlas Towers Kenya Limited against Airtel Africa and American Tower Corporation (ATC), ultimately dismissing the allegations of restrictive trade practices. Here are the key details of the investigation and its findings:

Quick Summary:

  • CAK investigates a complaint lodged by Atlas Towers Kenya Limited against Airtel and ATC.
  • Atlas alleges that Airtel and ATC’s agreement constitutes vertical restraint of trade.
  • CAK finds no evidence of dominance by either Airtel or ATC in their respective markets.
  • Consequently, CAK dismisses the complaint, as the threshold for dominance required by Kenyan regulations is not met.

Allegations of Vertical Restraint:

Atlas Towers Kenya Limited raised concerns about an agreement between Airtel Africa and American Tower Corporation (ATC) where it alleged that if the deal was allowed to go through, then it would result in vertical restraint of trade. The complaint revolves around ATC providing tower sites for telcos like Airtel, with Airtel committing to meet an “Annual Quota” of ATC sites in exchange for financial rebates.

CAK Investigations and Findings:

  • CAK reviewed the complaint in accordance with its regulations on dominance and restrictive trade practices to assess whether Airtel and ATC hold a dominant market position in their respective sectors.
  • Despite ATC holding a significant share of the passive infrastructure market in Kenya, neither Airtel nor ATC was found to be dominant.
  • According to Kenyan regulations, dominance is defined as controlling not less than one-half of the total goods or services supplied or rendered in Kenya.
  • Since the threshold for dominance required by section 23 of the Act was not met by Airtel or ATC, CAK closed the matter.

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