East Africa’s most prosperous economy is not surprisingly the regions mobile technology cluster. Kenya with its capital Nairobi, has a vibrant ICT community with a number of top-class, innovative technology firms and research and development facilities. With the deregulation of the telecommunications sector,Kenya moved beyond a duopoly consisting of Safaricom and Kencell (today Zain Kenya…tomorrow Bharti) at the end of 2008 when Orange Kenya and Yu launched services as the third and fourth players. Combined, the total subscriber base is over 18,5 million users (CCK 2009) out of a population of about 40 million (UN 2009).
The deregulation, together with the introduction of a single license for ICT service providers, have in many ways leveled the playing field for other service providers and lead to increased competition. In this streamlined licensing framework, a holder of a single license can offer many different services without additional licenses. Also, during 2009, the telecommunication regulator in Kenya “established policy guidelines on infrastructure sharing in an effort to ease the investment burden of new entrants into the market and avoid duplication of resources” (CCK 2009). As a result, Zain Kenya and Yu agreed to share infrastructure.
The operators in Kenya have really made an effort to reach more users through creative marketing,compelling tariffs and promotions, and expanded network infrastructure. The high number of subscribers is however a double-edged sword for operators. The overall revenues are still high and increasing but the Average Revenue Per User, ARPU, has declined. Due to increased competition, operators are forced to lower their prices which opens up for new subscribers among low-income groups, i.e people who can not spend too much.
Statistics from the Kenyan regulator on mobile traffic reveal that in average,a Kenyan subscriber talk only 48 minutes per month and send 16 SMS (CCK 2009).
In Kenya, the main institutions in the sector are:
• The Ministry of Information and Communications (www.information.go.ke/), which was created in order to facilitate ICT development in Kenya. The functions of the Ministry are mainly to formulate and implement ICT policies, promote the development of ICT capacity and to disseminate and enhance public access to information.
• The Communications Commission of Kenya (CCK, www.cck.go.ke/) is the independent regulatory authority for the communications industry in Kenya. Its role is to license and regulate tele- and radio-communications, and postal/courier services in Kenya. It was established in February 1999 by the Kenya Communications Act, 1998.
• Kenya ICT Board (www.ict.go.ke) mandate is fourfold: market and promote Kenya as an ICT destination both locally and internationally; advise the government on all relevant matters pertaining to the development ICT in the country; capacity building for government and other stakeholders; and project management, i.e. coordinating, directing and implementing ICT projects in development.