2013 Kenya - Telecoms, Mobile, Broadband and Forecasts
This annual report provides a comprehensive overview of trends and developments in Kenya’s telecommunications market. Subjects covered include:
One of the most competitive mobile markets in the region;
Market and industry overviews;
Government policies affecting the telecoms industry;
Market liberalisation and regulatory issues;
Telecoms operators – privatisation, acquisitions, new licences;
Major players (fixed, mobile and broadband);
Mobile voice and data markets, including 3G, 4G;
Average Revenue per User (ARPU);
Broadband, including 3G mobile;
Fibre to the Home (FttH);
Convergence (voice/data, fixed/wireless/mobile);
The emergence of e-commerce, e-learning and e-government services.
Companies covered in this report:
Access Kenya; Africa Online (Telkom SA); Afsat Communications; Alcatel-Lucent; Bharti Airtel (formerly Zain, Celtel); Dimension Data; Essar Telecom Kenya (Yu, formerly Econet); Gilat Satellite Networks; Huawei Technologies; IGO Wireless; Indigo Telecom (Thuraya); Inmarsat; Internet Solutions Kenya (InterConnect); iWay Africa; Jamii Telecom; KenTV; Kenya Data Networks (KDN); Kenya Pipeline Corporation (KPC); Kenya Power and Lighting Company (KPLC); Liquid Telecom; MTN Business Kenya (UUNet); Nation TV (NTV); Nokia Siemens Networks (NSN); OneCom; Safaricom (Vodafone); SimbaNet; Swift Global; Telkom Kenya (Orange, France Telecom); Wananchi Online; ZTE.
Researcher:- Peter Lange Current publication date:- July 2013 (12th Edition)
Mergers and acquisitions in Kenya’s second-tier telco market
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 more than fifty-fold between 2009 and 2013. Prices had already fallen significantly following the liberalisation of international gateway and national backbone network provision a few years earlier, 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.
Companies that started out as ISPs 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. At least six major deployments of WiMAX technology and four Fibre to the Home (FttH) rollouts are underway. Advanced services such as IPTV/triple-play, e-commerce, e-learning and e-government are now rapidly evolving. However, the infrastructure investments have been costly and the market has become more competitive, which has led to takeovers in the sector. Several infrastructure sharing agreements have been forged.
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 also 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.
A price war has characterised Kenya’s mobile communications sector in recent years, following the market entry of the third and fourth network. This has led to accelerated subscriber growth, but it has also presented challenges to the profitability of the operators, forcing them to streamline their operations and develop new revenue streams in an environment of falling average revenue per user (ARPU) in the voice market. Third generation (3G) mobile broadband services as well as mobile payment and banking services are delivering these additional revenues, but all service segments are highly competitive. For fourth generation (4G/LTE) technology, the Kenyan government is following a unique open-access approach with plans to licence a multi-facetted consortium to operate the network.
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 2014 and 2017.
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
(Source: BuddeComm based on various sources)
Table of Contents
1. Key Statistics
2. Telecommunications Market
2.1 Overview of Kenya’s telecom market
3. Regulatory Environment
3.1 Kenya Communications Act 1998
3.2 Regulatory authority
3.2.1 Communications Commission of Kenya (CCK)
3.2.2 Independent Communications Commission of Kenya Bill 2011
We wanted to extend our Com World Series of telecoms industry events to the South Pacific region and we were in urgent need of a partner in the region who could assist us with confirming the involvement of governments, telcos and more. Paul Budde and his team executed this perfectly. Paul also provided us with very high quality reports on every aspect of the project, including an amazingly thorough and actionable report on the conference presentations and discussion.
Joe Willcox, Commercial Content Director, Emap Connect, Emap