The Republic of Kenya is a developing economy, which is primarily dependent on agriculture and related industries. Agriculture constituted approximately 21.4 percent of the country's GDP in 2009.
Kenya possesses much scope for economic growth and the economy's recovery in recent years has been achieved due to measures such as incentives for farm production and development of small scale primary industries.
In the early 1990s, Kenya's economy suffered greatly due to inefficient management of agricultural and international trade policies. However, in 1993 the economy began to revive as it benefited from policies of economic liberalisation, privatisation and the support of international organisations such as the IMF and World Bank. However, the economy's growth stagnated once again in 1997. The overdependence of Kenya's economy on agriculture with low-priced goods and the severe drought in the country in 1999, which deeply affected agriculture production, have been some of the major reasons for the lack of modernisation in the country. Corruption, which is widespread in Kenya, especially in the judicial system, is another major problem. Other issues of concern for the country are an unstable political environment and the widespread problem of HIV/AIDS.
The economy's recovery since 2002 has been achieved through measures such as incentives for farm production and the development of small-scale primary industries. However, post election violence together with the global financial crisis leading to a reduction in exports contributed to a reduction in GDP growth to 2.2% in 2008, a reduction of 7% from 2007.
The growth of telecoms in Kenya has been slow until recently, mainly due to strict government regulations. The market has been partially liberalised only recently and has since been growing at a faster pace. The introduction of 3G services will aid the growth of the telecom sector.
Table 1 provides an overview of the country's key economic parameters.
Table 1 provides an overview of the country's key economic parameters.
Table 1: Kenya - Important Economic Parameters (Est 2009)
Figure 2, below, illustrates the market share of the operators, measured in terms of subscriber numbers, between 4Q 2005 and 1Q 2010.
Figure 2: Kenya Mobile Operator Market Share 4Q 2005 - 1Q 2010
Source: industry sources, Blycroft estimates c. Blycroft 2011
Safaricom
Safaricom was the first operator to launch GSM-based mobile service in Kenya in 1999. It has more recently launched voice SMS, mobile advertising, missed call alert and SIMEX. Their 3G network now covers Nairobi, Mombasa, Magadi, Eldoret and Naivasha with 301 3G-enabled base stations and they have recently acquired a 51% stake in One Communication Ltd to provide fixed and wireless data services.
The majority of its shares are owned by Vodafone Kenya.
Figure 3 shows the latest ownership structure of the company.
