Last updated: 28 May 2014 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. Subjects covered include:
Researcher:- Peter Lange
Current publication date:- May 2014 (13th Edition)
Executive Summary
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 over the past three years. 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 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, which prompted France Telecom to announce in early 2014 that it is looking for a buyer of its stake.
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. Following heavy subscriber losses, the two smallest players in the market, Orange and Yu (operated by India’s Essar) announced they are planning to exit the market. For fourth generation (4G/LTE) technology, the Kenyan government was following a unique open-access approach with plans to licence a multi-facetted consortium to operate the network, but this met with resistance from the existing operators.
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 2015 and 2018.
Market highlights:
Estimated market penetration rates in Kenya’s telecoms sector – end 2014
Market |
Penetration rate |
Mobile |
76% |
Fixed |
0.1% |
Internet |
63% |
(Source: BuddeComm based on various sources)
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.
Data in this report is the latest available at the time of preparation and may not be for the current year
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