2015 Kenya - Telecoms, Mobile and Broadband - Market Insights

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:

  • Market and industry analyses, trends and developments;
  • Facts, figures and statistics;
  • Industry and regulatory issues;
  • Infrastructure developments;
  • Major Players, Revenues, Subscribers, ARPU, MoU;
  • Internet, VoIP, IPTV;
  • Mobile Voice and Data Markets;
  • Broadband (FttP, DSL, cable, wireless);
  • Convergence and Digital Media;
  • 3G subscriber and mobile ARPU forecasts;
  • Government policies affecting the telecoms industry;
  • Market liberalisation and industry issues;
  • Telecoms operators – privatisation, IPOs, acquisitions, new licences;
  • Mobile technologies (GSM; 3G, HSPA, LTE).

Researcher:- Henry Lancaster
Current publication date:- April 2015 (14th Edition)

Executive Summary

Kenyan government disagrees on terms of sale for Orange Kenya

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:

  • Orange Group claims to have lost control of Orange Kenya following failed sale negotiations;
  • Merger and acquisition activity continuing among second-tier telcos;
  • ASO achieved in late March 2015;
  • Liquid Telecom expands its FttP infrastructure, provides free WiFi service to select cities;
  • Internet.org launches in Kenya providing limited free internet access;
  • International internet bandwidth continues to increase;
  • Safaricom contracts Nokia Networks to develop LTE-A network, shares capacity on its LTE infrastructure;
  • Orange Kenya closes CDMA network;
  • Safaricom and Bharti Airtel acquire Essar Telecom’s assets and subscribers;
  • Dubai Bank Kenya partners with Rapid Communications to develop the M-SASA mobile banking platform;
  • One Network Area scheme reducing call charges between countries of the East African Community;
  • New MVNO licences awarded;
  • Report update includes the regulator’s market data to December 2014, telcos’ operating and financial data to Q4 2014, recent market 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.

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
    • 3.3 Revised Telecommunications Market Structure 2004
    • 3.4 Kenya Communications Amendment Act 2009
    • 3.5 Licence fees
    • 3.6 Universal Service Fund (USF)
    • 3.7 Tariff regulation
    • 3.8 Interconnection
    • 3.9 Number portability
    • 3.10 Spectrum auctions
    • 3.11 Foreign ownership
    • 3.12 Dominant market player designation
    • 3.13 Telecom sector liberalisation in Kenya
      • 3.13.1 Regional telecom licences
      • 3.13.2 Second national operator (SNO) licensing
      • 3.13.3 International gateway licences
      • 3.13.4 VoIP telephony
      • 3.13.5 Converged licensing regime since 2008
      • 3.13.6 BPO subsidies
  • 4. Fixed Network Operators
    • 4.1 Telkom Kenya (Orange Kenya)
      • 4.1.1 Fixed-line statistics
      • 4.1.2 Wireless Local Loop (WLL)
      • 4.1.3 Tariffs
      • 4.1.4 Privatisation
      • 4.1.5 The company under France Telecom management
    • 4.2 Fixed-wireless operators
    • 4.3 Liquid Telecom, KDN
    • 4.4 Jamii Telecom
    • 4.5 AccessKenya
  • 5. Telecommunications Infrastructure
    • 5.1 National fibre backbone infrastructure
      • 5.1.1 Telkom Kenya, NOFBI
      • 5.1.2 Liquid Telecom
      • 5.1.3 Kenya Power and Lighting Company (KPLC)
      • 5.1.4 Kenya Pipeline Corporation (KPC)
      • 5.1.5 Safaricom
      • 5.1.6 MTN
      • 5.1.7 Fibre infrastructure sharing
    • 5.2 International infrastructure
      • 5.2.1 Satellite
      • 5.2.2 Terrestrial fibre
      • 5.2.3 Submarine fibre
  • 6. Internet Market
    • 6.1 Overview
      • 6.1.1 Internet statistics
      • 6.1.2 Forecast internet users – 2015; 2018
      • 6.1.3 Facebook and LinkedIn
    • 6.2 PC penetration, e-waste ban
    • 6.3 Public internet access locations
      • 6.3.1 Digital Villages
    • 6.4 Internet backbone infrastructure
      • 6.4.1 Telkom Kenya, JamboNet
      • 6.4.2 Alternative data carriers
      • 6.4.3 Public data network operators (PDNO)
      • 6.4.4 Unified licensing regime since 2008
      • 6.4.5 National fibre backbone networks
      • 6.4.6 International fibre, internet bandwidth
    • 6.5 Internet Exchange Points (IXP)
    • 6.6 Kenya Network Information Centre (KENIC)
    • 6.7 National broadband strategy
    • 6.8 ISP market
      • 6.8.1 Africa Online Kenya
      • 6.8.2 AccessKenya (Dimension Data)
      • 6.8.3 Wananchi Online
      • 6.8.4 MTN Business Kenya (formerly UUNet)
      • 6.8.5 Swift Global (KDN)
      • 6.8.6 InterConnect, Internet Solutions Kenya
      • 6.8.7 Orange Kenya (Telkom)
  • 7. Broadband Market
    • 7.1 Overview
    • 7.2 ADSL
      • 7.2.1 ADSL2
    • 7.3 Wireless broadband
      • 7.3.1 WiFi
      • 7.3.2 WiMAX
      • 7.3.3 Mobile data services
    • 7.4 Broadband via satellite
    • 7.5 Leased lines
    • 7.6 Fibre-to-the-Premises (FttP)
  • 8. Digital Media/Digital Economy
    • 8.1 VoIP telephony
      • 8.1.1 New VoIP guidelines 2005
      • 8.1.2 VoIP licences
    • 8.2 Video streaming
    • 8.3 Digital TV
    • 8.4 E-learning
      • 8.4.1 National research and education network (NREN)
    • 8.5 E-commerce
    • 8.6 E-government
    • 8.7 Blogs
    • 8.8 Facebook
  • 9. Mobile Communications
    • 9.1 Overview of Kenya’s mobile market
      • 9.1.1 General statistics
      • 9.1.2 Mobile voice
      • 9.1.3 The price caps on interconnection rates introduced in 2007 (see chapter  REF _Ref237927872 \r \h Roaming
      • 9.1.4 Mobile statistics
      • 9.1.5 Mobile broadband/data
      • 9.1.6 Forecasts
    • 9.2 Regulatory issues
      • 9.2.1 Roaming
      • 9.2.2 Mobile Termination Rates (MTRs)
      • 9.2.3 International gateways
      • 9.2.4 Mobile Number Portability (MNP)
      • 9.2.5 Network sharing
      • 9.2.6 Quality of Service (QoS) control
      • 9.2.7 SIM card registration
      • 9.2.8 Taxes
      • 9.2.9 Tariff regulation
      • 9.2.10 MVNO licences
    • 9.3 Mobile infrastructure
      • 9.3.1 Analogue networks
      • 9.3.2 Digital networks
      • 9.3.3 Other infrastructure developments
      • 9.3.4 Satellite mobile
    • 9.4 Major mobile operators
      • 9.4.1 Mobile market shares
      • 9.4.2 Safaricom
      • 9.4.3 Bharti Airtel Kenya (formerly Zain, Celtel, KenCell)
      • 9.4.4 Essar Telecom Kenya (yuMobile, formerly Econet)
      • 9.4.5 Orange Kenya (Telkom Kenya)
      • 9.4.6 Mobile Virtual Network Operators (MVNOs)
    • 9.5 Mobile content and applications
      • 9.5.1 Flashback
      • 9.5.2 Mobile money transfer, m-banking
      • 9.5.3 Mobile TV
      • 9.5.4 Satellite mobile
    • 9.6 Handsets
      • 9.6.1 Counterfeit handsets
      • Table 1 – Country statistics Kenya – 2014
      • Table 2 – Fixed-line statistics – 2014
      • Table 3 – Internet provider statistics – 2014
      • Table 4 – Internet user statistics – 2014
      • Table 5 – Mobile statistics – 2014
      • Table 6 – National telecommunications authority
      • Table 7 – Telecom sector revenue in Kenya – 2011 - 2018
      • Table 8 – Historic - Fixed lines in service and teledensity in Kenya – 1999 - 2004
      • Table 9 – Fixed lines in service and teledensity in Kenya – 2005 - 2015
      • Table 10 – Fixed-wireless subscriptions in Kenya – 2007 - 2014
      • Table 11 – International bandwidth in Kenya – 2000 - 2014
      • Table 12 – International bandwidth capacity by platform – 2013 - 2014
      • Table 13 – International bandwidth used – 2013 - 2014
      • Table 14 – Historic - Internet users and penetration rate in Kenya – 1999 - 2004
      • Table 15 – Internet users and penetration rate in Kenya – 2005 - 2015
      • Table 16 – Internet subscriptions in Kenya – 2010 - 2015
      • Table 17 – Wireless internet subscriptions in Kenya by access technology – 2010 - 2014
      • Table 18 – Fixed-line internet subscriptions in Kenya by access technology – 2010 - 2014
      • Table 19 – Internet services revenue and investments – 2009 - 2014
      • Table 20 – Forecast internet users – 2015; 2018
      • Table 21 – Fixed-line internet subscribers in Kenya by operator – 2013 - 2014
      • Table 22 – AccessKenya corporate leased-line customers – 2006 – 2012
      • Table 23 – Mobile internet subscribers by provider – 2013 - 2014
      • Table 24 – Zuku TV (Kenya) triple-play pricing – 2015
      • Table 25 – Mobile services revenue and investments – 2008- 2014
      • Table 26 – Historic - Mobile subscribers and penetration rate in Kenya – 1999 - 2004
      • Table 27 – Mobile subscribers and penetration rate in Kenya – 2005 - 2016
      • Table 28 – SMS traffic – 2012 - 2014
      • Table 29 – MMS traffic – 2012 - 2014
      • Table 30 – Forecast mobile subscribers – 2015; 2018
      • Table 31 – Market share of subscribers by operator – 2010 - 2014
      • Table 32 – Safaricom ARPU – 2007 - 2013
      • Table 33 – Safaricom subscribers – 2010 - 2014
      • Table 34 – Safaricom revenue – 2011 - 2014
      • Table 35 – Safaricom revenue by sector – 2010 - 2015
      • Table 36 – Airtel Kenya subscribers – 2010 - 2014
      • Table 37 – Zain Kenya ARPU – 2006 - 2009
      • Table 38 – Historic - Essar Telecom subscribers – 2010 - 2014
      • Table 39 – Orange Kenya revenue – 2010 - 2014
      • Table 40 – Orange Kenya mobile subscribers – 2010 - 2014
      • Table 41 – Mobile money transfer statistics – 2011 - 2014
      • Table 42 – Safaricom - M-Pesa revenue – 2008 - 2015
      • Chart 1 - Fixed lines in service and teledensity in Kenya – 2005 - 2015
      • Chart 2 - Internet users and penetration rate in Kenya – 2005 - 2015
      • Chart 3 - Mobile subscribers and penetration rate in Kenya – 2005 – 2016
      • Chart 4 – Market share of subscribers by operator – 2010 – 2014
      • Exhibit 1 – The CCK coup of 2005
      • Exhibit 2 – Definitions - video streaming and IPTV
      • Exhibit 3 – Texting elephants
      • Exhibit 4 – Job offers by SMS
      • Exhibit 5 – Emergency rescue scheme for Lake Victoria

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