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.

For more information see – Kenya - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses