The Telecommunications Industry in Kenya 2022

Introduction

The Kenyan telecommunications industry has been a lifeline during the COVID-19 pandemic, connecting people and enabling activities such as online learning, working remotely from home, ecommerce and financial services.

In response to the surge in demand for mobile voice, data and internet services, telecommunications companies are rolling out high-capacity infrastructure countrywide. Kenya launched 5G trials in March 2021, becoming the second country in Africa to do so, after South Africa. The sector provides employment for over 19,250 people and accounts for 1.8% of Kenya’s GDP, making it comparatively small by global standards. However, with the rollout of 5G technology underway, stakeholders say that the sector offers high growth potential.

Opportunities

Fibre rollout will provide internet access to more people.

Growing demand for affordable internet-enabled 4G devices. Growth of streamed content and other value-added services will boost demand for data. The mobile money market is set to become more competitive. The provision of 5G mobile telecoms infrastructure.

Outlook

Economic activity in Kenya has rebounded and is steadily gathering momentum following the easing of pandemic restrictions.

With projected GDP growth of 5.3% in 2021, dipping marginally to 5.2% in 2022, Kenya is hoping to attract investors and there are opportunities in the telecommunications industry, where the rollout of 5G is underway. Role players anticipate demand for voice, data, internet and mobile money services to strengthen considerably as the digital divide between rural and urban areas narrows. While Kenya’s growth prospects appear favourable, analysts do not anticipate strong investment inflows prior to the August 2022 elections. An added concern is Russia’s recent invasion of Ukraine and its ramifications.

Report Coverage

This report focuses on the telecommunications industry in Kenya and includes information on the state and size of the industry, the major players, infrastructure development and technology rollouts, major developments and factors that influence the sector.

There are profiles of 23 companies including major players such as Telkom Kenya, Safaricom and Airtel, South African companies in Kenya such as MTN and Vodacom, data communications services companies such as Jamii Telecommunications and underseas cable companies such as The East African Marines Systems.

Strengths

Improved coverage and connectivity due to the rollout of telecommunications infrastructure and undersea cable linkages.

In March 2021, Kenya becomes the second country in Africa (after South Africa) to launch 5G trials. In the ten years before the pandemic, Kenya recorded an average GDP growth rate of 5% per year. Kenya is East Africa’s financial, transport and technological hub and the largest economy in the sub-region, ahead of Ethiopia. Kenya is the seventh largest telecoms market in Africa (based on subscriptions). Kenya is the world’s largest provider of mobile money services. The development of telecoms infrastructure is a key component of the Kenyan government’s Vision 2030 strategic plan.

Threats

Climate-related shocks.

Cyber security risks. Domestic and global economic pressures. Global ramifications of the Ukraine crisis. Pandemic-related disruptions. Terrorist attacks from militant groups such as Somalia-based al-Shabaab. The possibility of violent protest in the run-up to Kenya’s elections in August 2022.

Weaknesses

Corruption is rife. Digital divide between urban and rural areas. High barriers to entry in the telecommunications space. Low level of digital knowledge and skills in rural areas. Market dominance of one player (Safaricom) is stifling competition. Shortage of ICT skills in the country. The relatively high cost of mobile devices and mobile services in Kenya.