Last updated: 23 May 2012 Update History
Report Status: Archived
Report Pages: 91
Analyst: Peter Lange
Publication Overview
This annual report provides a comprehensive overview of trends and developments in Kenya’s telecommunications market. Quarterly updates include the latest available statistical data and major industry events. Subjects covered include:
Companies covered in this report:
Telkom Kenya (Orange, France Telecom), Safaricom (Vodafone), Bharti Airtel (formerly Zain, Celtel), Essar Telecom Kenya (Yu, formerly Econet), Kenya Data Networks (KDN), Jamii Telecom, Access Kenya, Kenya Power and Lighting Company (KPLC), Kenya Pipeline Corporation (KPC), SimbaNet, Africa Online (Telkom SA), Wananchi Online, MTN Business Kenya (UUNet), Swift Global, Internet Solutions Kenya (InterConnect), IGO Wireless, OneCom (Safaricom), Gilat Satellite Networks, Afsat Communications, Flexible Bandwidth, iWay Africa, Call Kenya Networks, Tangerine, Inmarsat, Indigo Telecom (Thuraya), Nation TV (NTV), KenTV.
Researcher:- Peter Lange
Current publication date: May 2012 (11th Edition)
Executive Summary
Kenya’s telecommunications and broadband market is undergoing a revolution following the arrival of three fibre optic international submarine cables (Seacom, TEAMS and EASSy), ending its dependency on limited and expensive satellite bandwidth. The country's international bandwidth increased more than eleven-fold in 2011. Prices had already fallen significantly following the liberalisation of international gateway and national backbone network provision in 2005, but they have now fallen by more 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. In parallel, the regulator has mandated price cuts on interconnection tariffs and proposed new competition regulations.
Companies that started out as ISPs – such as AccessKenya, Kenya Data Networks (KDN) and Wananchi – are transforming themselves into second-tier telecom companies by rolling out national and metropolitan fibre backbones and wireless broadband access networks, offering converged voice, data and video/entertainment services. At least six major deployments of WiMAX technology are underway, and third generation (3G) mobile broadband services have been launched. Advanced services such as IPTV/triple-play, e-commerce, e-learning and e-government are now rapidly evolving.
The country’s incumbent fixed-line telco, Telkom Kenya, is revamping its infrastructure and services under the Orange brand with fresh capital from its new majority shareholder, France Telecom, and it has also re-entered the mobile market. 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. Several fibre infrastructure sharing agreements have been forged.
A price war has characterised Kenya’s mobile communications market since 2008, following the market entry of the third and fourth network, Econet Wireless Kenya (EWK, in which India’s Essar acquired a stake), and Telkom Kenya under the Orange brand. Subscriber growth is now forecast to slow gradually over the coming years, and rapidly falling ARPU levels have driven one of the incumbents, Zain (which was subsequently acquired by Bharti Airtel), deeper into negative earnings, leaving only the market leader, Safaricom, with a net profit, although reduced. Financial performance has improved again in the 2011 financial year.
The operators are developing new revenue streams from third generation (3G) broadband and mobile banking services, and the leading operator has begun LTE trials. With market penetration rates in Kenya’s broadband and traditional banking sector still very low, the mobile networks have an opportunity to relive the phenomenal growth rates seen in the voice sector in recent years.
This report contains an overview of Kenya’s mobile, fixed-line, Internet and broadband market, its emerging digital economy, profiles of the major players in all market sectors, relevant statistics, analysis, and forecasts for the mobile and internet market to 2013 and 2016.
Market highlights:
Estimated market penetration rates in Kenya’s telecoms sector – end 2012
Market |
Penetration rate |
Mobile |
72% |
Fixed |
0.1% |
Internet |
52% |
(Source: BuddeComm based on various sources)
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