2014-02-10 15:48:02 - Kenya - Telecoms, Mobile, Broadband and Forecasts - a new market research report on companiesandmarkets.com
Kenya´s telecommunications and broadband market has undergone a revolution following the arrival of four fibre-optic international submarine cables, ending its dependency on limited and expensive satellite bandwidth. The countrys international bandwidth increased more than fifty-fold between 2009 and 2013. Prices had already fallen significantly following the liberalisation of international gateway and national backbone network provision a few years earlier, but they have now fallen by more than 90%, enabling cheaper tariffs for telephone calls and broadband internet services. However, ISPs have only reluctantly passed on the cost savings to end-customers, which has prompted the industry regulator, the Communications Commission of Kenya (CCK) to consider price caps.
Companies that started out as ISPs have transformed themselves into second-tier telcos by rolling out
national and metropolitan fibre backbones and wireless broadband access networks, offering converged voice, data and video/entertainment services. At least six major deployments of WiMAX technology and four Fibre to the Home (FttH) rollouts are underway. Advanced services such as IPTV/triple-play, e-commerce, e-learning and e-government are now rapidly evolving. However, the infrastructure investments have been costly and the market has become more competitive, which has led to takeovers in the sector. Several infrastructure sharing agreements have been forged.
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. The country´s incumbent fixed-line telco, Telkom Kenya has embarked on revamping its infrastructure and services under the Orange brand with fresh capital from its new majority shareholder, France Telecom, and it has also re-entered the mobile market. However, the company is still making losses and required a substantial cash injection in 2012 as part of major restructuring program.
A price war has characterised Kenya´s mobile communications sector in recent years, following the market entry of the third and fourth network. This has led to accelerated subscriber growth, but it has also presented challenges to the profitability of the operators, forcing them to streamline their operations and develop new revenue streams in an environment of falling average revenue per user (ARPU) in the voice market. Third generation (3G) mobile broadband services as well as mobile payment and banking services are delivering these additional revenues, but all service segments are highly competitive. For fourth generation (4G/LTE) technology, the Kenyan government is following a unique open-access approach with plans to licence a multi-facetted consortium to operate the network.
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