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Kenya - Telecoms, Mobile, Broadband and Forecasts


Attention: There is an updated edition available for this report.

For those needing high level strategic information and objective analysis on the telecommunications sector in Kenya, this report is essential reading and gives further information on:

  • One of the most competitive mobile markets in the region;
  • Government policies affecting the telecoms industry;
  • Market liberalisation and regulatory issues;
  • Telecoms operators - privatisation, acquisitions, new licences;
  • Internet and broadband development and growth;
  • 3G mobile broadband rollouts and pricing;
  • Average Revenue per User (ARPU);
  • The m-banking services shaking up the traditional banking sector;
  • The emergence of e-commerce, e-learning and e-government services.


Kenya’s telecommunications and broadband market is undergoing a revolution following the arrival of three fibre optic international submarine cables in Kenya in 2009 and 2010 (Seacom, TEAMS and EASSy), ending its dependency on limited and expensive satellite bandwidth. Bandwidth prices had already fallen significantly following the liberalisation of international gateway and national backbone network provision in 2005, but they have now fallen by 90%, enabling cheaper tariffs for telephone calls and broadband Internet services. However, Internet service providers (ISPs) have only reluctantly passed on the cost savings to end customers, which has prompted the industry regulator to consider price caps.

Besides tariff regulation, other regulatory issues on the agenda in 2010 include interconnection, number portability and universal service.

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. Companies that started out as ISPs - such as AccessKenya, Kenya Data Networks (KDN) and Wananchi - are transforming themselves into second-tier telecom companies by rolling out national and metropolitan fibre backbones and wireless-broadband access networks, offering converged voice, data and video/entertainment services. Several fibre infrastructure sharing agreements have been forged. At least six major deployments of WiMAX technology are underway and 3G mobile broadband services with up to 7.2Mb/s have been launched. Advanced services such as IPTV/triple-play, e-commerce, e-learning and e-government are now rapidly evolving.

The country’s incumbent fixed-line telco, Telkom Kenya, is revamping its infrastructure and services under the Orange brand with fresh capital from its new majority shareholder, France Telecom. It has also re-entered the mobile market and has embarked on a strategy to transform itself into a true broadband connectivity provider.

A price war has characterised Kenya’s mobile communications market in 2008 and 2009, following the market entry of the third and fourth network, Econet Wireless Kenya (EWK, in which India’s Essar acquired a stake), and Telkom Kenya under the Orange brand. Subscriber growth is now forecast to slow over the coming years, and rapidly falling ARPU levels have driven one of the incumbents, Zain, deeper into negative earnings, leaving only the market leader, Safaricom, with a net profit, although reduced.

The operators are developing new revenue streams from 3G broadband and mobile banking services. The first LTE trials are planned for 2010. With market penetration rates in Kenya’s broadband and traditional banking sector still extremely low, the mobile networks have an opportunity to relive the phenomenal growth rates seen in the voice sector in recent years.

This report contains an overview of Kenya’s mobile, fixed-line, Internet and broadband market, profiles of the major players in all market sectors, relevant statistics, analysis, and mobile subscriber forecasts for 2012 and 2015.

Market highlights:

  • Forecasts for Kenya’s mobile market to 2012 and 2015;
  • Decreasing ARPU under intense competition between four mobile networks;
  • Growing new revenue streams from mobile broadband and m-banking services;
  • Arrival of international fibre bandwidth in 2009 and 2010 is revolutionising the market;
  • Competing national fibre backbones to enable converged voice, data and video services and lower prices;
  • Profiles of major players in all market sectors;
  • The rebirth of Telkom Kenya under the Orange brand;
  • The emergence of new second-tier telcos;
  • Fibre infrastructure sharing agreements;
  • LTE trials planned in 2010.Estimated market penetration rates in Kenya’s telecoms sector - end 2010
  • Market Penetration rate
  • Mobile 60%
  • Fixed 0.7%
  • Internet 15%
  • (Source: BuddeComm based on various sources)
  • Data in this report is the latest available at the time of preparation and may not be for the current year.

1. Key Statistics
2. Telecommunications Market
2.1 Overview of Kenya’s telecom market
2.2 Telecom sector liberalisation in Kenya
2.2.1 Regional telecom licences
2.2.2 Second national operator (SNO) licensing
2.2.3 International gateway licences
2.2.4 Voice over Internet Protocol (VoIP) telephony
2.2.5 Converged licensing regime since 2008
2.2.6 BPO subsidies
3. Regulatory Environment
3.1 Kenya Communications Act 1998
3.2 Regulatory authority
3.2.1 Communications Commission of Kenya (CCK)
3.3 Revised Telecommunications Market Structure 2004
3.4 Kenya Communications Amendment Act 2009
3.5 Universal Service Fund (USF)
3.6 Tariff regulation
3.7 Interconnection
3.8 Number portability
3.9 Foreign ownership
4. Fixed Network Operators
4.1 Telkom Kenya Ltd (Orange Kenya)
4.1.1 Fixed-line statistics
4.1.2 Wireless Local Loop (WLL)
4.1.3 Tariffs
4.1.4 ARPU
4.1.5 Privatisation
4.2 Fixed-wireless operators
4.3 Kenya Data Networks (KDN)
4.4 Jamii Telecom
4.5 AccessKenya
5. Telecommunications Infrastructure
5.1 National fibre backbone infrastructure
5.1.1 Telkom Kenya
5.1.2 KDN
5.1.3 Kenya Power and Lighting Company (KPLC)
5.1.4 Kenya Pipeline Corporation (KPC)
5.1.5 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
6.2 Limited availability of PCs
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 Additional international data carrier licences
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
6.5 Internet exchange points (IXP)
6.6 Kenya Network Information Centre (KENIC)
6.7 ISP market
6.7.1 AccessKenya
6.7.2 Wananchi Online
6.7.3 UUNet Kenya
6.7.4 Swift Global
6.7.5 InterConnect, Internet Solutions Kenya
6.7.6 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
8. Convergence and Digital Media
8.1 Voice over Internet Protocol (VoIP) telephony
8.1.1 New VoIP guidelines 2005
8.1.2 VoIP licences
8.2 IPTV, triple-play
8.3 Internet TV
8.4 Digital TV
8.5 E-learning
8.5.1 National research and education network (NREN)
8.6 E-commerce
8.7 E-government
9. Mobile Communications
9.1 Overview of Kenya’s mobile market
9.1.1 Mobile statistics
9.2 Regulatory issues
9.2.1 Interconnection
9.2.2 International gateways
9.2.3 Mobile Number Portability (MNP)
9.2.4 Quality of Service (QoS) control
9.2.5 Registration of subscriber details
9.2.6 Taxes
9.2.7 Tariff regulation
9.3 Major mobile operators
9.3.1 Safaricom Ltd
9.3.2 Zain Kenya (formerly Celtel, KenCell)
9.3.3 Essar Telecom Kenya (Yu, formerly Econet)
9.3.4 Orange Kenya (Telkom Kenya)
9.4 Mobile voice services
9.4.1 Prepaid cards
9.4.2 Special regional tariffs
9.4.3 International roaming
9.4.4 VoIP
9.4.5 Flashback
9.4.6 GSM community phones
9.4.7 Price war 2008, 2009
9.4.8 Low-cost handsets
9.4.9 Satellite mobile
9.5 Mobile data services
9.5.1 Short Message Service (SMS)
9.5.2 Multimedia Messaging (MMS)
9.5.3 GPRS and EDGE
9.5.4 BlackBerry
9.6 3G
9.7 Long-term Evolution (LTE)
9.8 M-payment, m-banking
9.8.1 M-Pesa (Safaricom)
9.8.2 ZAP (Zain)
9.8.3 yuCash (Essar)
9.8.4 Orange Money
9.8.5 Other services
9.9 Mobile TV
9.10 Forecasts
9.10.1 Forecast mobile subscribers - 2012; 2015
10. Glossary of Abbreviations
List of Tables and Exhibits
Table 1 - Country statistics Kenya - 2010
Table 2 - Fixed-line statistics - 2010
Table 3 - Internet provider statistics - 2010
Table 4 - Internet user statistics - 2010
Table 5 - Mobile statistics - 2010
Table 6 - National telecommunications authority
Table 7 - Fixed lines in service and annual change - 1995 - 2011
Table 8 - Internet users and penetration rate - 1996 - 2011
Table 9 - KIXP traffic - 2004 - 2008
Table 10 - AccessKenya corporate leased-line customers - 2006 - 2009
Table 11 - Mobile subscribers and penetration rate - 1996 - 2011
Table 12 - Estimated mobile subscribers by operator, technology and annual change - 2009
Table 13 - Safaricom ARPU - 2007 - 2009
Table 14 - Zain Kenya ARPU - 2006 - 2009
Table 15 - Zain Kenya GPRS/EDGE pricing - 2009
Table 16 - Forecast mobile subscribers - 2012; 2015
Exhibit 1 - The CCK coup of 2005
Exhibit 2 - Emergency rescue scheme for Lake Victoria
Exhibit 3 - Texting elephants
Exhibit 4 - Job offers by SMS

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