Kenyan telecommunications giant Safaricom is facing a legal battle with Goodweek Inter-Services Limited, one of its long-standing dealers, over allegations of unfair contract terms that led to the termination of their business relationship.
Goodweek claims that Safaricom exploited its dominant market position to impose restrictive contractual conditions, ultimately resulting in the revocation of its dealership rights. The case, now before Kenya’s High Court, also names Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited as respondents, suggesting that the dispute extends beyond Safaricom itself.
Goodweek Inter-Services Limited, which has been a Safaricom dealer since 2002, was responsible for distributing M-PESA services, SIM cards, and other Safaricom products. However, trouble began in April 2024 when the company was blocked from Safaricom’s dealer portal following the expiration of its dealership contract.
Safaricom insists that the suspension was automatic, explaining that Goodweek failed to renew its agreement, unlike over 400 other dealers who successfully extended their contracts within the same period.
Goodweek, however, disputes this version of events, arguing that Safaricom used its dominant market position to pressure dealers into signing one-sided contracts. The company alleges that the new terms included provisions that allowed Safaricom to terminate agreements unilaterally and imposed unrealistic sales targets.
For instance, Goodweek was required to register 20,700 new customers in 2023 but fell short, signing up 17,322 subscribers. The company contends that such high benchmarks were strategically designed to withhold commissions and other benefits from dealers.
In response, Goodweek has filed a petition with the Constitutional and Human Rights division of the High Court, challenging what it describes as unfair business practices. By including Vodafone Plc, Vodafone Kenya Limited, and Mobitelea Ventures Limited in the lawsuit, Goodweek suggests that the issue is systemic within Safaricom’s broader corporate structure.
Safaricom’s legal team has questioned the inclusion of these additional parties, arguing that the dispute is fundamentally a commercial matter that should be handled through arbitration rather than a constitutional court.
The outcome of the case could have significant implications for Kenya’s telecommunications sector. A ruling in favour of Goodweek may embolden other dealers to challenge existing contracts, potentially leading to a reassessment of standard business practices among major telecom providers.
