Kenya - Massive transformation in the Internet market
September 2007
Paul Budde writes:
Kenya's Internet sector is undergoing massive transformation.
Several new carriers have been licensed to compete with Telkom Kenya in the international bandwidth market and several large-scale national and international fibre projects are being rolled out.
This will bring bandwidth prices down and open the Internet up to the mass market.
VoIP Internet telephony has been liberalised, promising to bring the long-awaited reduction of international and long-distance calling rates. Wireless broadband technologies and ADSL, soon to be followed by ADSL2, have been introduced and at least four WiMAX network rollouts are going on or being planned with the aim of providing converged voice, data and video/broadband TV (triple-play) services.
Mergers and acquisitions are in full swing as the various players in this fast growing market are positioning themselves.
Kenya’s mobile market looks likely to move beyond a duopoly in 2007 with the third operator, already licensed since 2003, set to finally overcome its legal challenges and shareholder disputes.
At the same time, fixed-line incumbent Telkom Kenya will be privatised and licensed to compete in the mobile sector directly, and the to-be-licensed second national operator (SNO) will have a mobile concession as well.
Telkom would have to dispose of its majority stake in leading mobile operator Safaricom, opening up an opportunity for strategic investors. Convergence is ever-present in this dynamic and fast growing market, with VoIP enabling cheaper calls through new international gateways, the introduction of 3G mobile services catapulting the mobile operators into the virtually untapped Internet sector, and mobile banking services empowering the largely un-banked population.
Enormous further growth potential exists, with mobile market penetration at only just over 20%.
2007 Telecoms, Mobile and Broadband in Africa
