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telecommunications kenya

Telecommunications in Kenya 2022

Carole Veitch | Kenya | 16 March 2022

Telecommunications in Kenya 2019

Natalie Bryden | Kenya | 11 October 2019

Telecommunications in Kenya 2016

Louise Mitchell | Kenya | 30 November 2016

Telecommunications in Kenya 2014

Amanda | Kenya | 28 July 2014

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Report Coverage

This report focuses on the telecommunications industry in Kenya and includes information on the state and size of the industry, the major players, infrastructure development and technology rollouts, major developments and factors that influence the sector. There are profiles of 23 companies including major players such as Telkom Kenya, Safaricom and Airtel, South African companies in Kenya such as MTN and Vodacom, data communications services companies such as Jamii Telecommunications and underseas cable companies such as The East African Marines Systems.

Introduction

The Kenyan telecommunications industry has been a lifeline during the COVID-19 pandemic, connecting people and enabling activities such as online learning, working remotely from home, ecommerce and financial services. In response to the surge in demand for mobile voice, data and internet services, telecommunications companies are rolling out high-capacity infrastructure countrywide. Kenya launched 5G trials in March 2021, becoming the second country in Africa to do so, after South Africa. The sector provides employment for over 19,250 people and accounts for 1.8% of Kenya’s GDP, making it comparatively small by global standards. However, with the rollout of 5G technology underway, stakeholders say that the sector offers high growth potential.

Strengths

• Improved coverage and connectivity due to the rollout of telecommunications infrastructure and undersea cable linkages.
• In March 2021, Kenya becomes the second country in Africa (after South Africa) to launch 5G trials.
• In the ten years before the pandemic, Kenya recorded an average GDP growth rate of 5% per year.
• Kenya is East Africa’s financial, transport and technological hub and the largest economy in the sub-region, ahead of Ethiopia.
• Kenya is the seventh largest telecoms market in Africa (based on subscriptions).
• Kenya is the world’s largest provider of mobile money services.
• The development of telecoms infrastructure is a key component of the Kenyan government’s Vision 2030 strategic plan.

Weaknesses

• Corruption is rife.
• Digital divide between urban and rural areas.
• High barriers to entry in the telecommunications space.
• Low level of digital knowledge and skills in rural areas.
• Market dominance of one player (Safaricom) is stifling competition.
• Shortage of ICT skills in the country.
• The relatively high cost of mobile devices and mobile services in Kenya.

Opportunities

• Fibre rollout will provide internet access to more people.
• Growing demand for affordable internet-enabled 4G devices.
• Growth of streamed content and other value-added services will boost demand for data.
• The mobile money market is set to become more competitive.
• The provision of 5G mobile telecoms infrastructure.

Threats

• Climate-related shocks.
• Cyber security risks.
• Domestic and global economic pressures.
• Global ramifications of the Ukraine crisis.
• Pandemic-related disruptions.
• Terrorist attacks from militant groups such as Somalia-based al-Shabaab.
• The possibility of violent protest in the run-up to Kenya’s elections in August 2022.

Outlook

Economic activity in Kenya has rebounded and is steadily gathering momentum following the easing of pandemic restrictions. With projected GDP growth of 5.3% in 2021, dipping marginally to 5.2% in 2022, Kenya is hoping to attract investors and there are opportunities in the telecommunications industry, where the rollout of 5G is underway. Role players anticipate demand for voice, data, internet and mobile money services to strengthen considerably as the digital divide between rural and urban areas narrows. While Kenya’s growth prospects appear favourable, analysts do not anticipate strong investment inflows prior to the August 2022 elections. An added concern is Russia’s recent invasion of Ukraine and its ramifications.

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Telecommunications in Kenya
Telecommunications in Kenya 2022

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R 6 500.00(ZAR) estimated $352.36 (USD)*

Industry Landscape

R 4 550.00(ZAR) estimated $ 246.65 (USD)*

Historical Reports

Telecommunications in Kenya 2019-10-11

R 1 900.00(ZAR) estimated $103.00 (USD)*

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Telecommunications in Kenya 2016-11-30

R 1 900.00(ZAR) estimated $103.00 (USD)*

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Telecommunications in Kenya 2014-07-28

R 1 900.00(ZAR) estimated $103.00 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY PROFILE 1
3. DESCRIPTION OF THE INDUSTRY 6
3.1. Industry Value Chain 9
3.2. Geographic Position 12
3.3. Size of the Industry 15
3.4. Key Success Factors and Pain Points 23
4. LOCAL 25
4.1. Key Trends 27
4.2. Notable Players 28
4.3. Corporate Actions 30
4.4. Regulations 32
4.5. Enterprise Development and Social Economic Development 35
5. AFRICA 36
6. INTERNATIONAL 40
7. INFLUENCING FACTORS 43
7.1. COVID -19 43
7.2. Economic Environment 45
7.3. Frequency Spectrum Management 47
7.4. Government Support 48
7.5. Infrastructure 50
7.6. Corruption 50
7.7. Cyber Security 50
7.8. Technology, Research and Development (R&D) and Innovation 51
7.9. Labour 52
7.10. Environmental Concerns 54
8. COMPETITIVE ENVIRONMENT 54
8.1. Competition 54
8.2. Barriers to Entry 55
9. SWOT ANALYSIS 56
10. OUTLOOK 57
11. INDUSTRY ASSOCIATIONS 58
12. REFERENCES 58
12.1. Publications 58
12.2. Websites 58
APPENDIX 1 60
Summary of Notable Indigenous and Foreign Players 60
COMPANY PROFILES 63
Airtel Networks Kenya Ltd 63
Dimension Data Solutions East Africa Ltd 65
DT One Fixed and Mobile Pte Ltd 67
East African Marines Systems Ltd (The) 69
Eaton Towers Ltd 71
Echotel International Kenya Ltd 73
Ericsson Kenya Ltd 75
FiberLink Ltd 76
Finserve Africa Ltd 77
Huawei Investment & Holding Co Ltd 79
Jamii Telecommunication Ltd 83
Liquid Intelligent Technologies Kenya Ltd 85
Mawingu Networks Ltd 87
MTN Business Kenya Ltd 89
NewTelco South Africa (Pty) Ltd 91
Poa Internet Kenya Ltd 93
Safaricom PLC 95
Sea Submarine Communications Ltd 98
Space Engineering Ltd 99
Telkom Kenya Ltd 101
Vodacom Group Ltd 105
Wananchi Group Kenya Ltd 109
ZTE (Kenya) Ltd 111

Introduction

This report focuses on the telecommunications sector in Kenya. Although telecommunications formally include a vast array of sub-sectors, like radio and television, this report focuses on telephony, internet and broadband and the infrastructure that supports them. In 2018, output of the ICT sector expanded by 12.9% to KSh390.2bn (Kenyan shilling) supported mainly by growth in the digital economy, mobile telephony, and internet penetration. Statistics issued by the Communications Authority of Kenya (CA) have shown continuous upward movement since 2013 with mobile penetration reaching 106.8% in the first quarter of 2019. Access to the internet is mostly through mobile phones, which have become increasingly available and affordable, and data/internet subscriptions stood at 46.8 million, out of which nearly half were on broadband. The Kenyan government identified the ICT industry as a key sector to aid rapid economic growth.

Strengths

• Fibre rollout throughout the country will give internet access to more people.
• Government focus and support of the ICT sector.
• Growing competition in the broadband segment.
• Increasing number of mobile phone users.
• Infrastructure sharing regulations enable more investment.
• Regulations and competition driving down prices.
• Undersea cables have brought lower cost bandwidth to Kenya.

Weaknesses

• High barriers to entry in the telecommunications space.
• Market dominance of one player (Safaricom) is stifling competition.
• Shortage of ICT skills in the country.
• Spectrum allocation is not regulated.
• Weak cyber security laws.

Opportunities

• Growing penetration rates of internet usage and broadband subscriptions will present opportunities for innovative companies to enter the market.
• Growth of streamed content and other over the top services will increase the need for data.
• Services such as mobile money continue to enjoy success. Addition of services such as insurance could generate additional revenues.
• With the growth of internet of things and machine to machine connections, telecommunications companies are in a position to disrupt industries.

Threats

• Corruption is still rife.
• Electricity supply constraints.
• Increasing IP theft, piracy and cybercrime.
• Most of the country’s workforce are working in the agriculture sector.
• Slowing economic growth may drive down consumer spend.
• The ICT Practitioners Bill will stifle innovation.

Outlook

Connectivity on the African continent will grow exponentially in the next five years. There are several opportunities for global and local companies and carriers to expand their services as connectivity issues are addressed. However, some impediments still lie in the path of maturation, namely inadequate electricity supplies, poor PC and broadband penetration and a consequent lack of computer literacy. However, these barriers are being steadily addressed. The Kenyan government has been rolling out e-education initiatives while service providers are developing data centre capabilities and adapting their offerings to meet specific market needs. Telecom companies are finding ways to monetise content, applications and services. These efforts will not only give them the capital to invest in creating a stronger and more efficient network infrastructure but will also promote internet adoption amongst the broader population.

Telecommunications in Kenya
Telecommunications in Kenya 2019

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

Telecommunications in Kenya 2022-03-16

R 6 500.00(ZAR) estimated $352.36 (USD)*

View Report Add to Cart

Telecommunications in Kenya 2016-11-30

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Telecommunications in Kenya 2014-07-28

R 1 900.00(ZAR) estimated $103.00 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 2
3.1. Industry Value Chain 3
3.2. Geographic Position 4
4. SIZE OF THE INDUSTRY 4
5. STATE OF THE INDUSTRY 7
5.1. Local 7
5.1.1. Corporate Actions 12
5.1.2. Regulatory Environment 12
5.1.3. Enterprise Development and Social Economic Development 15
5.1.4. Opportunities for SMMEs 16
5.2. Continental 16
5.3. International 19
6. INFLUENCING FACTORS 22
6.1. Economic Environment 22
6.2. Frequency Spectrum Management 23
6.3. Government Initiatives 23
6.4. Private Sector Initiatives 26
6.5. Infrastructure 27
6.6. Corruption 28
6.7. Cybercrime and IT Security 28
6.8. Technology, Research and Development (R&D) and Innovation 29
6.9. Environmental Concerns 30
6.10. Labour 30
6.11. Electricity Supply Constraints 32
7. COMPETITION 33
7.1. Barriers to Entry 33
8. SWOT ANALYSIS 34
9. OUTLOOK 35
10. INDUSTRY ASSOCIATIONS 36
11. REFERENCES 36
11.1. Publications 36
11.2. Websites 37
APPENDIX 1 38
Summary of Notable Players 38
APPENDIX 2 42
Technology Service Providers of Kenya (Tespok) Membership List 42
COMPANY PROFILES 44
AIRTEL NETWORKS KENYA LTD 44
DT ONE FIXED AND MOBILE PTE LTD 47
EAST AFRICAN MARINES SYSTEMS LTD (THE) 50
EATON TOWERS LTD 52
ERICSSON KENYA LTD 55
FINSERVE AFRICA LTD 56
HUAWEI INVESTMENT & HOLDING CO LTD 58
IWAY AFRICA KENYA LTD 62
JAMII TELECOMMUNICATION LTD 64
LIQUID TELECOM KENYA LTD 66
MTN BUSINESS KENYA LTD 68
NEWTELCO SOUTH AFRICA (PTY) LTD 70
SAFARICOM PLC 72
SEA SUBMARINE COMMUNICATIONS LTD 75
SPACE ENGINEERING LTD 76
TELKOM KENYA LTD 78
VODACOM GROUP LTD 82
WANANCHI GROUP KENYA LTD 86
ZTE (KENYA) LTD 88

Report Coverage

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.

Introduction

This report focuses on the telecommunications sector in Kenya. Although telecommunications formally includes a vast array of sub-sectors, like radio and television, this report focuses on telephony, internet and broadband, as well as the infrastructure that supports them. The Information and Communications Technology (ICT) sector was the smallest contributor to Kenya’s GDP of US$59.8bn in 2015 at 0.9% compared to 1.2% in 2014. Nonetheless, statistics issued by the Communications Authority of Kenya (CA) have shown continuous upward movement since 2013 with mobile penetration reaching 89.2%, internet penetration 87.2% and broadband penetration 18.6% in the first quarter of 2016. The Kenyan government identified the ICT industry as a key sector to aid rapid economic growth. The theme of the CA’s annual ICT Week that was held in May 2016 was “ICT Entrepreneurship for Social Impact”, which reflects the initiatives and projects that are aimed at improving connectivity in rural areas in order to bolster the economic activities of entrepreneurs.

Strengths

• Excess available bandwidth.
• Government focus and support of the telecommunications sector.
• Infrastructure sharing regulations.
• Regional cooperation is driving down roaming costs.
• Regulations driving down prices.

Weaknesses

• A shortage of skilled labour limits the growth of the industry.
• High barriers to entry.
• Increasing quality of service problems in the mobile sector.
• Ineffective regulation development and enforcement.
• Market dominance by one player is prohibiting new entrants and squeezing out others.
• Spectrum allocation is not regulated.

Opportunities

• Increasing demand for data and internet services.
• Low penetration rates in internet, mobile and broadband present opportunities for companies to enter the market.
• Value-added services such as mobile finance and content delivery.

Threats

• Electricity supply constraints.
• Increasing IP theft, piracy and cybercrime.
• Increasing terrorist activity and corruption.
• Regulatory intervention to reduce tariffs will result in downward trends in revenue.
• The ICT Practitioners Bill 2016 could stifle the socio-economic impact of the sector.
• Worsening economic performance, driving down consumer spend.

Outlook

Fixed-line and mobile connectivity has become a vital aspect of the Kenyan economy and analysts concur that demand for telecommunications services is set to grow. With the arrival of 4G in Kenya demand for broadband and mobile data will increase. Heavy investment in infrastructure will be required, but the availability of broadband from the undersea cable systems will contribute to the local industry’s ability to meet this demand. Analysys Mason predicts that 2G will remain the predominant technology in Kenya, while 3G’s share of connections is expected to increase to 38% in 2021. Stakeholders emphasise that 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.

Read More..
Telecommunications in Kenya
Telecommunications in Kenya 2016

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

Telecommunications in Kenya 2022-03-16

R 6 500.00(ZAR) estimated $352.36 (USD)*

View Report Add to Cart

Telecommunications in Kenya 2019-10-11

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Telecommunications in Kenya 2014-07-28

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 10
4.1. Local 10
4.1.1. Corporate Actions 16
4.1.2. Regulations 16
4.1.3. Enterprise Development and Social Economic Development 18
4.2. Continental 20
4.3. International 22
5. INFLUENCING FACTORS 24
5.1. Frequency Spectrum Management 24
5.2. Government Initiatives 24
5.3. Infrastructure 25
5.4. Cybercrime and IT Security 26
5.5. Economic Environment 28
5.6. Private Sector Initiatives 29
5.7. Technology, Research and Development (R&D) and Innovation 29
5.8. Environmental Concerns 30
5.9. Labour 31
5.10. Corruption, Political Violence and Terrorism 33
5.11. Electricity Supply Constraints 34
6. COMPETITION 35
6.1. Barriers to Entry 35
7. SWOT ANALYSIS 36
8. OUTLOOK 36
9. INDUSTRY ASSOCIATIONS 37
10. REFERENCES 37
10.1. Publications 37
10.2. Websites 38
APPENDIX 1 40
TESPOK Members as of October 2016 40
COMPANY PROFILES 42
ACCESS KENYA GROUP LTD 42
AIRTEL NETWORKS KENYA LTD 45
EAST AFRICAN MARINES SYSTEMS LTD (THE) 48
EATON TOWERS LTD 50
ERICSSON KENYA LTD 53
FINSERVE AFRICA LTD 54
HUAWEI TECHNOLOGIES INVESTMENT CO LTD 56
INDIGO TELECOM LTD 58
IWAY AFRICA KENYA LTD 59
JAMII TELECOMMUNICATION LTD 61
LIQUID TELECOM KENYA LTD 63
MTN BUSINESS KENYA LTD 65
NEWTELCO SOUTH AFRICA (PTY) LTD 67
SAFARICOM LTD 69
SEA SUBMARINE COMMUNICATIONS LTD 72
SEMA MOBILE SERVICES LTD 74
TELKOM KENYA LTD 75
VODACOM GROUP LTD 79
WANANCHI GROUP KENYA LTD 83
ZTE (KENYA) LTD 85

Introduction

The steadily growing ICT and telecommunications industry contributed 12.1% to Kenya’s GDP of US$44bn in 2013. Currently, mobile penetration at 76.9%, internet penetration at 52.3% and broadband penetration at 3.54% show there is opportunity for growth in the industry. The mobile market is set to change as new companies have received licences to enter the market, while two players are in the process of exiting the market. The country has a strong mobile money transfer service sector that showed 10.8% growth in 2013. The Kenyan government’s Vision 2010 policy has earmarked the telecommunications industry as one of the pillars on which to build the country’s economy. This has resulted in increased investment by government to make Kenya a hub of telecommunications innovation and a focus on generating policy and legislation to support ICT growth.

Strengths

• Excess available bandwidth.
• Government focus and support of the ICT industry.
• Strong mobile banking transfer services sector.

Weaknesses

• A shortage of skilled labour limits the growth of the industry.
• Expensive internet services.
• Increasing QoS problems in the mobile sector.
• Limited competition in the mobile market.

Opportunities

• Expanded mobile money transfer services because of smartphone uptake and new innovative apps.
• Government support of innovation in the ICT sector could drive specific areas such as smartphone uptake.
• Low penetration rates in internet and broadband sectors present opportunities for companies to enter the market.

Threats

• Delay in DTT migration results in delays in the allocation of spectrum to mobile operators for mobile broadband roll-out.
• High taxation rates threaten revenue and mobile money transfer service and smartphone uptake.
• Regulatory intervention to reduce tariffs will result in downward trends in revenue.
• Terrorist activity threatens economic stability
• Vandalism threatens QoS and investment into infrastructure by players.

Outlook

The Kenyan telecommunications market is expected to show slow but steady growth. MEF’s African Growth Market Study which surveyed mobile business leaders revealed that 70% of Kenyan respondents were optimistic about the telecommunications industry in the country. Increased internet penetration and smartphone uptake will continue to be one of the main drivers of increased data and mobile money transfer use. As a result, mobile data revenue is likely to exceed voice revenue by 2016 and reach US$828m. The market, however, is changing with the entry of new players in the mobile as well as the mobile money transfer market. These developments are likely to lead to fierce competition and possible price wars as mobile operators compete for subscribers in a market dominated by Safaricom.

Telecommunications in Kenya
Telecommunications in Kenya 2014

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

Telecommunications in Kenya 2022-03-16

R 6 500.00(ZAR) estimated $352.36 (USD)*

View Report Add to Cart

Telecommunications in Kenya 2019-10-11

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Telecommunications in Kenya 2016-11-30

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
11. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Supply Chain 2
3. SIZE OF THE INDUSTRY 2
4. STATE OF THE INDUSTRY 5
4.1. Local 5
4.1.1. Fixed Line Telephony 5
4.1.2. Cellular / Mobile Telephony 5
4.1.3. Data / Internet Services 6
4.1.4. Undersea Cabling 7
4.1.5. Mobile Money Transfer Service 7
4.1.6. Corporate Actions 8
4.1.7. Regulations 9
4.2. Continental 10
5. INFLUENCING FACTORS 12
5.4.1. Skill shortages 13
5.4.2. Training Initiatives 13
5.4.3. Environmental Concerns 13
6. COMPETITION 14
6.1. Barriers to Entry 15
6.1.1. Technology, R&D and Innovation 15
7. SWOT ANALYSIS 16
8. OUTLOOK 16
9. INDUSTRY ASSOCIATIONS 16
10. REFERENCES 17
10.1. Publications 17
10.2. Websites 17
APPENDIX 1 18
TESPOK Members 18
COMPANY PROFILES 19
ACCESS KENYA GROUP LTD 19
AIRTEL NETWORKS KENYA LTD 22
ESSAR TELECOM KENYA LTD 24
HUAWEI TECH INVESTMENT CO LTD 26
IWAY AFRICA KENYA LTD 27
JAMII TELECOMMUNICATION LTD 28
LIQUID TELECOM KENYA LTD 29
MTN BUSINESS KENYA LTD 30
ONE COMMUNICATIONS LTD 31
SAFARICOM LTD 32
SEA SUBMARINE COMMUNICATIONS LTD 36
TELKOM KENYA LTD 37
VODACOM GROUP LTD 40
WANANCHI GROUP KENYA LTD 43