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Kenya - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

  • March 2016
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 95 pages

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Telkom Kenya sale to Helios set to change Kenya’s telecom landscape
Kenya’s telecommunications market continues to undergo substantial changes, prompted by increased competition, improved international connectivity, and rapid developments in the mobile market. The landing of four fibre-optic submarine cables reduced the cost of phone calls and internet access, allowing internet services to be affordable to a far greater proportion of the population. In parallel, the sector’s regulator has reduced interconnection tariffs and implemented a range of regulations aimed at developing further competition.

The incumbent fixed-line telco, Telkom Kenya, has been managed by Orange Group since 2007 but has struggled to make headway in the competitive market. The group sold its 70% interest in the operator to Helios in November e2015, a move which may yet see the state increase its holding in the company to 40%.

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. Numerous competitors are rolling out national and metropolitan fibre backbone networks and wireless access networks, delivering services to population centres across the country. Several fibre infrastructure sharing agreements have been forged.

Kenya’s mobile market has continued to grow steadily, supported by a subscriber base of about 40 million by early 2016. Some market consolidation occurred following the acquisition by Airtel and Safaricom of Essar Telecom’s yuMobile business. While all operators have invested in mobile technologies and infrastructure upgrades to support mobile data services, competition has nevertheless presented challenges to the profitability of network operators, with uneven revenue growth reported in recent years. Orange Group is the principal casualty and is in the process of exiting the market. By contrast, Safaricom, controlling two-thirds of the subscriber market, has seen very strong growth on the back of its popular M-PESA payment platform. Competitive pressure has also encouraged players to streamline operations, reduce workforces and sell off their tower portfolios.

To encourage the development of LTE services the government has pursued an open-access approach. A number of MVNO licences awarded since 2014 have added to the competitive mix, with Equitel establishing a market share of about 3% by the end of 2015.

Kenya’s broadband market has been transformed in recent years through a combination of increased investments in network upgrades as well as the landing of submarine cables. This has helped make broadband services affordable for the mass market, while also providing the key backhaul network for the burgeoning mobile broadband sector.

A number of major WiMAX deployments and FttP rollouts have been undertaken, which have pushed fast broadband connectivity to a greater number of subscribers. The number of FttP connections broached 100,000 by September 2015. Most broadband subscribers remain via mobile networks. A range of services including video streaming, e-commerce, e-learning and e-government are evolving rapidly on the back of this improved infrastructure.

This report contains an overview and general analyses of Kenya’s telecom market, including updated statistics, assessments of recent regulatory measures, details on licensing regimes and spectrum allocations, and profiles of the major players. It encompasses developments in the fixed-line voice and broadband sectors, as well as in mobile sectors, including developments in 3G and LTE and the mobile payments and banking ecosystem.


Key developments:
Telecom regulator loses some powers to the Competition Authority of Kenya;
Orange Group agrees to sell its holding in Telkom Kenya to Helios;
Merger and acquisition activity continuing among second-tier telcos;
M-Tiba mobile health payment platform launched;
Regulator proposes limit of ten SIM cards per subscriber;
Safaricom launches Hello Doctor m-medicine service;
One Network Area initiative expands to include mobile data and mobile money services;
Government starts KES17 billion school laptops project;
Report updates include the regulator’s market data updates to September 2015, telcos’ operational and financial data to Q3 2015, 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; Liquid Telecom, Safaricom (Vodafone, IGO Wireless, OneCom); Bharti Airtel (formerly Zain, Celtel); Essar Telecom Kenya (yuMobile, formerly Econet); Huawei Technologies; ZTE; Alcatel-Lucent; Nokia Networks, 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.

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