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Kenya - Telecoms, Mobile and Broadband - Market Insights

  • April 2015
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 105 pages

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

Kenya - Telecoms, Mobile and Broadband - Market Insights
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 237927872 \r 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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