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Kenya Telecommunications Report Q3 2011
Business Monitor International, May 2011, Pages: 82
The update to the Kenya telecommunications market report for this quarter incorporates latest regulatory data and operational figures published by some of the major telecoms service providers in the market. It also includes a maiden ARPU forecast for the Kenyan market. Meanwhile, Kenya moved up two places on BMI's Q311 Telecoms Business Environment Ratings table for Sub-Saharan Africa on the back of improved country risk and country rewards scores and a high score in the Industry Risk category.
The latest regulatory data on the Kenyan mobile market relates to the end of September 2010. According to the telecoms regulator, the Communications Commission of Kenya (CCK), there were more than 22mn subscribers at the end of September 2010. The surge in subscriber uptake in Q310 followed sharp cuts to mobile tariffs by operators. BMI believes the trend continued in Q410 considering strong net additions reported by Airtel Kenya and Orange Kenya in that quarter. This report, therefore, maintains the previous estimate that the number of mobile subscribers reached 24mn at the end of December 2010, reflecting mobile penetration of almost 59%. With the price war extending into 2011, BMI expects high growth rates to continue in 2011 and 2012 before slowing in the latter part of our forecast period. This report still expects the market to have more than 40mn subscribers or mobile penetration of about 86% by the end of 2015.
The CCK launched mobile number portability (MNP) service in Kenya on April 1 2011. This report expects this to add a new dimension to the fierce competition in Kenya's mobile market. According to data from the CCK, about 8,000 users submitted requests for their numbers to be ported to another network in the first two weeks of the service's introduction.
Latest regulatory data from the CCK show a sharp drop in fixed-line subscriptions, driven by massive subscriber losses in the fixed wireless segment. By the end of September 2010, total fixed-line subscriptions stood at 369,971, down by 40% y-o-y from 615,211 at the end of September 2009. The fluctuation in fixed-line subscriptions in Kenya makes it difficult to forecast the sector's growth trajectory over the next five years, especially as there is no clear explanation for the sharp decline in subscriber numbers after a period of impressive growth.
Meanwhile, Kenya's fixed broadband sector continues to record investments in network development and higher value services by the country's leading ISPs. In March 2011, fixed-line incumbent Telkom Kenya (Orange) launched double-play services in Nairobi and announced plans to launch triple-play offerings by the end of 2011. Telkom Kenya's high-speed broadband network is technically a fibre-to-the-cabinet network as the last mile to homes and offices is through copper.
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