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The Communications Commission of Kenya (CCK), since its inception, liberalized the telecommunication sector as a whole and there are private companies entering the market. Currently, there are four private telecommunications companies, Safaricom, Celtel (Zain), Telkom Kenya (Orange), and Essar (YU).

Kenya shows impressive growth rates with significant opportunity. By the end of 2008, Kenya had more than 15.0 million mobile subscribers, with a mobile penetration rate of 39 percent and with a subscriber base forecast of 29.28 million, or 66.7 percent penetration, by year-end 2013. The forecasts unveil that total revenue of Kenya’s telecom market will grow by 42% from US$1.39 billion in 2008 to US$1.98 billion by 2013, out of which 78% of the total revenue to be generated by the mobile sector.

Licenses & Regulations

Communications Commission of Kenya (CCK) is the independent regulatory authority for the communications industry in Kenya. Its role is to license and regulate telecommunications, radio communication and postal/courier services in Kenya. It also issues licenses to Internet Service Providers as well as other communication devices that go beyond unlicensed frequencies.

The CCK operates under the Kenya Communications Act No. 2 of 1998. In recognition of the rapid changes and developments in technology, the Government in January 2009 enacted the Kenya Communications (Amendment) Act 2009. This statute enhanced the regulatory scope and jurisdiction of CCK, and effectively transformed it to a converged regulator.

Fixed Lines

Telephone service quality in Kenya remained problematic at times.The total number of people remaining to be connected to telephone service in Kenya stood at 7 million in 2003. Emerging private mobile telephone companies provide service capacity, but remained too expensive for many citizens.

Mobile

Kenya, Tanzania and the Democratic Republic of Congo (DRC) account for more than half of the mobile telephone market in the East and Central Africa region. Kenya itself has around 22 million mobile subscribers in total, or a 40% penetration rate (2010). The country has four licensed mobile operators, Safaricom, Zain, Orange Kenya and Yu. In 2008, Safaricom controlled 78% of the total market share while Zain had 17%. Telkom Kenya's Orange and Essar's Yu had four and one percent respectively. The operators are developing new revenue streams from 3G broadband and mobile banking services. The first LTE trials are planned for 2010. Celtel, which operates in fifteen African countries, launched its One Network service in September 2006, that allows Celtel subscribers in the three countries to make cross-border calls at near-local rates, while receiving incoming regional calls free of charge.

In 2009, Kenyan mobile operators launched a mobile banking service. Safaricom launched M-Pesa service and Zain also launched its ZAP mobile money service and, YU launched its yuCash mobile money offering which is based on the global Obopay service. This was seen as shift for the ultimate move to drive e-commerce in Kenya.

Mobile Operators

Average Revenue per User (ARPU)

The fall in the ARPU has impacted negatively on the companies bottom lines making them to look for ways of bringing down the costs. Safaricom, for example, will launch new services for corporate clients, including broadband, video conferencing and voice, in order to boost its ARPU's and its market share among high-value subscribers. The company expects to see the share of its revenue that comes from Internet services to increase from 13% to 20% as a result of its converged-services strategy. In 2009, ARPU for Safaricom was US$ 6, while ARPU for Orange Kenya and Zain where US$1.8 and US$4.

Internet

Through the licensing of thirty ISPs, Kenya has one largest Internet sectors in Africa. The Internet is available in universities, internet cafes, community information centers and public libraries.

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. Moreover, several new carriers have been licensed to compete with Telkom Kenya (Orange Kenya) in the international bandwidth.

VoIP Internet telephony has been liberalized, in the hope of bringing long-awaited reduction of international and long-distance calling rates. Wireless broadband technologies and ADSL, soon to be followed by ADSL2, have been put forward. At least six major WiMAX network rollouts are underway and 3G mobile broadband services with up to 7.2Mb/s have been launched with the aim of providing converged voice, data and video/broadband TV (triple-play) services. Advanced services such as IPTV/triple-play, e-commerce, e-learning and e-government are now rapidly evolving.

Key Figures

  • Number of main lines in use: 243,700 (2008)
  • Number of mobile subscribers: 22,556,000 (2010)
  • Number of internet users: 3,359,600 (Jun. 2009)
  • Number of ISPs: 30 licensed providers (2008)
  • Number of Internet hosts: 32,913 (2009)
  • Internet penetration rate: 8.6% (2009)
  • Mobile penetration rate:40% (2008)

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