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Kenya Telecommunications Report Q2 2010
Market |
Telecommunications |
Report Type |
Market Research |
Country |
Kenya |
Published |
3 March 2010 |
Number of Pages |
78 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Our Q2 2010 update on Kenya’s telecommunications market contains newly revised forecasts for the country’s fixed-line, broadband and mobile telephony markets. Our forecasts, which extend to the end of 2014, incorporate second quarter data published by the country’s telecoms watchdog, the Communications Commission of Kenya (CCK), as well as third quarter data published by Kenya’s mobile operators. At the end of September 2009, the Kenyan mobile sector continued to be dominated by Safaricom, over which Vodafone of the UK has managerial control. In the third quarter of the year, Safaricom continued to benefit from the decline of Zain Kenya’s mobile customer base. In 2009, Zain Kenya was engaged in a process of ‘cleaning up’ its mobile customer base, a process that involved the deactivation of inactive prepaid users. The shrinkage of Zain’s customer base slowed considerably in Q309, hopefully marking a change of fortunes for the operator.
While Zain’s customer base fell throughout much of 2009, and while Safaricom continued to post steady subscriber gains, the sector’s two smaller operators – Orange Kenya (owned by Telkom Kenya) and Essar Telecom Kenya, which is majority-owned by India’s Essar Communications, continued to register strong subscriber gains. As the Kenyan mobile market becomes more competitive, we expect the next major battleground for the operators to be in the realm of 3G services. Safaricom is currently the only Kenyan cellco that offers 3G mobile telephony. However, in October 2009, Zain revealed that it had successfully acquired a 3G licence and expressed plans to roll out a 3G network in the first half of 2010. Then in December 2009 Telkom Kenya (Orange) revealed plans to conduct 3G trials across its network. The latest regulatory data shows that Kenya’s fixed telephony market grew throughout the first half of 2009. Although the market for traditional PSTN services resumed growth after a period of steady decline, it was the fixed-wireless segment that experienced the greatest growth. Incumbent telecoms company Telkom Kenya is one of three operators that provide fixed-wireless services. The other two operators, Flashcom and Popote Wireless, are licensed to provide fixed-wireless services in specific regions. Meanwhile, following the inauguration of the SEACOM submarine cable system in July 2009, it was announced in October 2009 that testing across the East African Marine Systems (TEAMS) submarine cable system had been completed. The launch of these and other cable systems is helping to provide Kenya with an increased supply of international bandwidth. This development has the potential to revolutionise the country’s internet market in the medium-to-long term.
Kenya has dropped from seventh to 10th position in our latest set of Business Environment Ratings for the region. The country receives a lower score overall, and this is mainly a reflection of its weaker Telecoms Market rating. The lower Telecoms Market rating is itself a reflection of the poor growth and flat or falling ARPU, which has characterised the country’s mobile market in recent months.
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