Last updated: 8 Apr 2015 Update History
Report Status: Archived
Report Pages: 105
Analyst: Henry Lancaster
Publication Overview
This report provides a comprehensive overview of trends and developments in Kenya’s telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:
Researcher:- Henry Lancaster
Current publication date:- April 2015 (14th Edition)
Executive Summary
Kenya’s telecommunications market has undergone considerable changes since the landing of four fibre-optic international submarine cables in recent years. The dramatic increase in international bandwidth not only ended the country’s dependence on limited and expensive satellite bandwidth, but the 90% fall in the cost of broadband access ensured that services have been made affordable for a large section of the population.
The country’s incumbent fixed-line telco, Telkom Kenya, has revamped its infrastructure and services under the Orange Kenya brand, having benefited from fresh capital from its 70% majority shareholder, the Orange Group. The company has also re-entered the mobile market, recently closing its CDMA network to focus on 3G and LTE. Orange Group’s plans to sell its stake in Orange Kenya have faltered in early 2015 over the failure of the government, as a 30% shareholder, to extend Telkom Kenya’s licences for a further 15 years and sell an additional 10% stake to the potential purchaser, Viettel.
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. As a result, a number of operators continue to roll out national and metropolitan fibre backbones and wireless access networks. Companies that started out as ISPs, including such as AccessKenya, Kenya Data Networks and Wananchi, have transformed themselves into second-tier telcos.
Kenya’s mobile market has continued to show strong growth in the number of subscribers. This has translated into sustained revenue growth for operators as they develop services on the back of heavy investments in technologies and in infrastructure upgrades. Some market consolidation has occurred following the regulator’s approval of the acquisition by Airtel and Safaricom of Essar Telecom’s yuMobile business. Competition has nevertheless presented challenges to the profitability of network operators, encouraging them to streamline operations and develop revenue streams from services such as mobile data, m-commerce and m-banking. To develop LTE services the government has pursued an open-access approach, though Safaricom pulled out of the proposed consortium which would operate the network. A number of MVNO licences awarded since 2014 have added to the competitive mix.
Key developments:
Companies mentioned in this report:
Telkom Kenya (Orange Kenya), Kenya Data Networks (KDN), Jamii Telecom, Access Kenya (Dimension Data), Kenya Power and Lighting Company (KPLC), Kenya Pipeline Corporation (KPC), Wananchi Telecom, Safaricom, Bharti Airtel, Liquid Telecom, SimbaNet; Africa Online, MTN Business Kenya (UUNet), Swift Global, Internet Solutions Kenya (InterConnect), Gilat Satellite Networks, Afsat Communications, Inmarsat, Indigo Telecom (Thuraya), Nation TV (NTV), KenTV, Essar Telecom Kenya (Yu, formerly Econet), Huawei Technologies; ZTE; Alcatel-Lucent; Nokia Networks.
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