Kenya: Kenya Communication Profile

Kenya’s telecommunications and broadband market has undergone a revolution following the arrival of four fibre-optic international submarine cables, ending its dependency on limited and expensive satellite bandwidth. The country's international bandwidth increased additional than fifty-fold between 2009 and 2013.

Prices had by presently fallen significantly following the liberalisation of international gateway and national backbone network provision a few years before, but they have presently fallen by additional than 90%, enabling cheaper tariffs for telephone calls and broadband internet services. However, ISPs have only reluctantly passed on the cost savings to end-customers, which has prompted the industry regulator, the Communications Commission of Kenya (CCK) to consider price caps.

A simplified and converged licensing regime introduced in 2008 has lowered the barriers to market entry and increased competition by allowing operators to offer any kind of service in a technology- and service-neutral regulatory framework. The country’s incumbent fixed-line telco, Telkom Kenya has embarked on revamping its infrastructure and services under the Orange brand with fresh capital from its new majority shareholder, France Telecom, and it has as well re-entered the mobile market. However, the company is still making losses and required a substantial cash injection in 2012 as part of major restructuring program.

Market highlights:

• Unique open-access approach to licensing 4G/LTE network;

• Price war in the mobile market is threatening profitability;
• Mobile banking revenue outstrips SMS and 3G mobile broadband;
• Telkom Kenya undergoing restructuring with major cash injection;
• Mergers and acquisitions among second-tier telcos;
• Four separate Fibre to the Home (FttH) deployments;
• International internet bandwidth has grown more than fifty-fold in three years;
• Broadband retail prices have not yet fallen as much as wholesale prices;
• Mobile operators enter the fibre market.

Estimated market penetration rates in Kenya’s telecoms sector – end 2013

Kenya - Internet and Broadband Market

Companies that started out as ISPs – such as AccessKenya, Kenya Data Networks and Wananchi – have transformed themselves into second-tier telcos by rolling out national and metropolitan fibre backbones and wireless broadband access networks, offering converged voice, data and video/entertainment services. However, the infrastructure investments have been costly and the market has become additional competitive, which has led to takeovers in the sector.

Kenya - Key Statistics, Regulatory and Fixed-Line Telecoms

The country’s incumbent fixed-line telco, Telkom Kenya has embarked on revamping its infrastructure and services under the Orange brand with fresh capital from its new majority shareholder, France Telecom, and it has as well re-entered the mobile market. However, the company is still making losses and required a substantial cash injection in 2012 as part of major restructuring program.