ICT and Telecom Sector Profile in Kenya

ICT Sector Profile of Kenya
The Kenyan ICT sector has registered substantial growth over the past years. In 2015 it contributed 0.9% to GDP. Telecoms continues to be an epicentre of growth as there has been enormous growth in the mobile communications industry. The number of mobile phones users in Kenya increased from 37.7m to 38.5m between December 2015 and December 2016, representing an increase of 3.2%. The only listed company in the sector, Safaricom, has a 71.2 % market share. As of December 2016 Safaricom had 27.7m mobile subscriptions, 21.6m. M-Pesa registered customers – the M-Pesa agency network is comprised of 124,084 agents – and 14.8m active 30-day mobile data subscriptions.
The other key player in sector, Airtel, holds 17.6% of the market and the remaining market share by several other operators.
Vision 2030

Vision 2030 proposes intensified application of STI to raise productivity and efficiency levels across the three pillars. It recognises the critical role played by research and development in accelerating economic development in all the newly industrialising countries of the world.      The government will create and implement an STI policy framework to support vision 2030. More resources will be devoted to scientific research, technological capabilities of the workforce, and in raising the quality of teaching mathematics, science and technology in schools, polytechnics and universities.

National ICT Policy Bill

The National ICT Policy Government Bill states that the vision for Kenya is to be “a prosperous ICT-driven society”. This is in order to “improve the livelihoods of Kenyans by ensuring the availability of accessible, efficient, reliable and affordable ICT services”.

Budget allocation 2017/18

Key allocations in the 2017/18 budget to the ICT sector include:-

  • KES 0.3 billion for the Single Window Support Project;
  • KES 1.2 billion for the roll out of IFMIS;
  • KES 0.6 billion for the establishment of the Kenya Advanced Institute of Science and Technology (KAIST) at Konza Technopolis;
  • KES 13.4 billion for the Digital Literacy Programme (School Laptop Project); and
  • KES 0.1 billion for Presidential Digital Talent Programme.

Government ICT Initiatives

The government has included strategies for development of the ICT sector in the country’s Vision 2030 goals that lead to increase of government in the sector. The initiatives include among other things the development of the Konza Technology City, valued at USD 14.5 billion

Local Innovation

A number of ICT hubs in Kenya have been established to promote the development and use of ICT technologies through co-working, collaboration and incubation services. One good example is iHub, who brings together technologists, investors, tech companies and hackers, creating an ecosystem of creators and users of ICT and mobile technologies

Key ongoing ICT infrastructure projects

Telecom infrastructure development in some parts of the country remains inadequate. As growth in urban areas stagnates, the rural markets is expected to be the next frontier. The regulator of the ICT sector, the Communications Authority, will be investing in voice and broadband to cover access gaps in high cost areas that private companies have not invested in.

National 4G network is underway through a joint venture by the Kenyan government and telecom operators. Mobile operator Safaricom was the first operator to market the 4G service, Orange and Airtel are expected to launch 4G services in 2017

Mobile penetration rates

CHARACTERISTICS

  • Kenya’s 90% penetration rate represented a total number of 39.7 million mobile subscribers in 2016 Prepaid subscribers make up for over 95% of the total mobile subscribers
  • Kenya’s continued mobile penetration growth is supported by mobile data services as well as handset affordability
  • The subscriber growth is expected to slow down in Kenya due to the high level of penetration
  • The current penetration rate presents opportunities for low- value strategies and mobile financial services as well as niche value added services
  • Fixed phone line penetration is low, at ~0.5% and is expected to decline further

Internet penetration in Kenya

CHARACTERISTICS

  • The relatively low internet penetration rate of 67% presents opportunities for growth in Kenya
  • Internet service providers have rolled out infrastructure mainly in major towns to provide fast and steady internet connection
  • Availability of affordable smartphones and cheaper internet bundles has contributed to internet penetration growth
  • Over 99% of internet users accessed the internet via smartphones and other hand held devices
  • Growth of e-commerce services, social networking, online mobile banking, research on mobile devices has pushed demand for internet use
  • All mobile operators have launched 3G. So far only Safaricom has launched 4G, but Airtel and Orange are expected to do so in 2017

Regulatory Framework

Information, Communications, Technology Authority (ICTA)

The ICTA was established through a legal notice of May, 2013 under the State Corporations Act Cap 446. This was actualized the Presidential Executive Order No. 2/2013, of May 2013 that merged The Kenya Information and Communications Technology (ICT) Board, The Directorate of e-Government, and The Government Information Technology Services (GITS) into the ICT Authority.

The Authority is tasked to;

  • Develop and position Kenya as a preferred ICT destination in Africa;
  • Develop and promote competitive ICT industries in Kenya;
  • Develop world class Kenya ICT institutions;
  • Increase access and utilization for ICT;
  • Promote e-government services;
  • Roll out digital Government initiative and;
  • Provide and ensure quality and standards in ICT industry

ICT & Innovation

The mandate of the State Department is derived from the Executive Order No. 1/2016 of May 2016 which stipulates the following functions;

  • National ICT Policy and Innovation;
  • Promotion of E-Government;
  • Promotion of Software Development Industry; ICT Agency (E-Government,
  • Kenya ICT Board and Government Information Technology Services);
  • Provision of ICT
  • Technical Support to MDAs;
  • Policy on Automation of Government Services;
  • Development of National Communication Capacity and Infrastructure and;
  • Management of National Fibre Optic Infrastructure

Broadcasting and Telecommunication

The mandate of the subsector is derived from the Executive Order No. 1/2016 of May 2016 which stipulated the following functions;

  • Telecommunications policy;
  • Broadcasting policy;
  • Language policy management;
  • Public communications;
  • Coordination of Government advertising services;
  • Postal and courier services and;
  • Government telecommunications services

The Ministry has six Semi Autonomous Government Agencies (SAGAs), one tribunal, two advisory councils and Secretariat with the following mandates;

Kenya Broadcasting Corporation (KBC)

Kenya Broadcasting Corporation was established by an Act of Parliament Cap 221 (Amended 1989)  to undertake public broadcasting services to inform, educate and entertain the public through radio and television services. Its primary functions are:

  • Impart knowledge through the process of effective communication with the public
  • Offer suitable entertainment services to the people of Kenya;
  • Promote an effective approach to the use of Radio and Television as tools for National Development; and
  • Spearhead the adoption of emerging technologies to improve on broadcasting in the country through migration from analogue to digital broadcasting.

Communications Authority of Kenya

Communications Authority of Kenya was established through the Kenya Communications Amendment Act, 2013 as the regulatory body for the communication’s sector to regulate telecommunications, postal and radio communication services.

Its functions as spelt out in the Kenya Information and Communication Act, Cap 411A of 1998 include;

  • Management of Radio Frequency Spectrum;
  • Foster growth, competition and investment in Telecommunication Sector;
  • Ensure operators compliance with the Act, regulations and licensing conditions;
  • Facilitate universal access and use of ICTs;
  • Protect the rights of users of ICT services, and
  • Ensure development and formulation of adequate standards for the ICT sector among others.

Postal Corporation of Kenya

The Postal Corporation of Kenya was established by the Postal Corporation of Kenya Act of 1998 to provide communications, postal distribution and financial services. The Corporation is mandated to:

  • Provide communications, distribution and financial services;
  • Production of stamps and provision of private letter boxes and;
  • Provide new products based on new ICT technologies for improved service delivery.

Media Council of Kenya

 Media Council of Kenya was established as a statutory body in October 2007 by the Media Act CAP 411B as the leading institution in the regulation of media, conduct and discipline of journalists. Its functions include:

  • To strengthen media monitoring, spearhead the adoption of a standardized curriculum for middle level training institutions in mass media and accredit educational institutions offering courses in journalism;
  • Accredit journalists and foreign journalists;
  • Develop and regulate standards governing journalists, media practitioners and media enterprises;
  • Advise the government on the relevant media regulations; and Manage dispute resolution concerning media and infra media.

Kenya Yearbook Editorial Board

The Kenya Yearbook was established vide legal Notice No. 187 of 2nd November, 2007 to: Compile, edit and publish the Kenya Yearbook; Document and detail the work of the Government of Kenya; Document the government development programme of action for improved economy, and; Document Kenya immense resources and potential.

Kenya Institute of Mass Communications (KIMC)

Kenya Institute of Mass Communication was established vide Legal Notice No. 197 of 2011 (Amended through Legal Notice No. 83 of 2012). It’s mandated to:

  • Offer training in communication and cinematic-arts;
  • Produce and disseminate products in communication, cinematic-arts and;
  • Develop and provide educational, cultural, professional, technical and vocational services to the community.

National Communications Secretariat

The National Communications Secretariat was established vide the Kenya Communications Act of 1998. Its mandate includes:

  • Advising the Government on info-communications policies;
  • Carrying out specialized research, and;
  • Conducting continuous review of development under the info-communications sector.

Communications and Multimedia Appeals Tribunal

The Kenya Communication Amendment Act of 2013 established the Communications Appeal Tribunal, for the purpose of arbitrating disputes between parties in the communications sector.

Universal Service Fund advisory Council

The purpose of the Fund which was established by Kenya Information and Communications Amendment Act 2013 is to support widespread access to ICT services, promote capacity building and innovation in ICT services in the country.

Government Advertising Agency

The Agency mandate as contained in the Executive Order No. 1/2016 of May 2016 on the Organization of the Government of the Republic of Kenya is to authorize public sector advertising and implementing sectorial standards, procedures, guidelines and managing consolidated government advertising funds.

Broadcast Content Advisory Council

The Council was established under the Information and Communications Amendment Act of 2013 to undertake administration of broadcast content and monitoring compliance with broadcasting code and ethics for broadcasters.

The ICT and Telecom Sector has been summarized to include the following

ICT and Telecom Profile
Infrastructure Support
Market in ICT and Telecom
Kenya Postal Sub sector
Broadcasting Services
Telecom Sub Sector
Investment opportunities