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 countrys international bandwidth increased more than fifty-fold in the past three years. Prices had already fallen significantly following the liberalisation of international gateway and national backbone network provision in 2005, but they have now fallen by more than 90%, enabling cheaper tariffs for telephone calls and broadband internet services. In parallel, the sector regulator, the Communications Commission of Kenya (CCK) has mandated price cuts on interconnection tariffs and implemented new competition regulations.
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 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. Various competitors are rolling out national and metropolitan fibre backbones and wireless access networks to take the new bandwidth and services to population centres across the country. Several fibre infrastructure sharing agreements have been forged.
Telkom Kenya undergoing restructuring with major cash injection;
Mergers and acquisitions among second-tier telcos;
Mobile operators enter the fibre market.
Companies covered in this report:
Telkom Kenya (Orange, France Telecom); Kenya Data Networks (KDN); Jamii Telecom; Access Kenya; Kenya Power and Lighting Company (KPLC); Kenya Pipeline Corporation (KPC); Wananchi; Safaricom; Bharti Airtel; MTN; Liquid Telecom.