The Telecommunications Industry in Kenya
The Information and Communications Technology (ICT) sector was the smallest contributor to Kenya’s GDP of US$59.8bn in 2015, at 0.9%, but has been identified by the government as a key sector to aid rapid economic growth. Since 2013 there has been continuous growth in the number of subscribers, with mobile penetration reaching 89.2%, internet penetration 87.2% and broadband penetration 18.6% in the first quarter of 2016.
In the Kenyan communications sector the sole fixed-line provider is Telkom Kenya, the semi-privatised national operator, and the mobile arena is dominated by Safaricom with a market share of 65.6%. Industry commentators blame Safaricom’s market dominance for the exit of India’s Essar in 2014 and France's Orange which sold its Kenyan operation in 2015. In an effort to gain market share all current role players have invested in and control some level of network infrastructure. Recent regulatory changes have resulted in mobile operators acquiring internet service providers (ISPs) who provide services that include broadband, business internet, fibre to the premises, local area networks, and satellite and VSAT.
Access to Frequency Spectrum
Frequency spectrum is a scarce resource and the management of its allocation impacts the performance of players in the sector. As Kenya currently has no clear policy that facilitates the allocation of spectrum, solving the problems related to spectrum is vital to ensure telecommunications services providers will be able to meet the demands of next-generation systems like 5G mobile.
The detailed report on Kenya’s Telecommunications sector describes the current market, examines the latest regulatory and corporate developments and discusses factors influencing the success of the sector. As well as profiling the two dominant companies, the report includes profiles for 18 other companies including two smaller players in the mobile sector, Airtel, and Finserve Africa Ltd t/a Equitel.