Kenya Broadband Telecommunications 2010 GIGA
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GIGA Broadband Telecommunications in Kenya 2010

GIGA Broadband Telecommunications in Kenya 2010

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Kenya Broadband Telecommunications 2010 GIGA Document Transcript

  • 1. Broadband Telecommunicationsin the Republic of Kenya 2010
  • 2. Roberto Bettuzzi and Marjaana KarjalainenBroadband telecommunications in the Republic of Kenya Helsinki 2011 3
  • 3. Tekes, the Finnish Funding Agency for Technology and Innovation Tekes is the main public funding organisation for research and development (R&D) in Finland. Tekes funds industrial projects as well as projects in research organisations, and especially promotes innovative, risk-intensive projects. Tekes offers partners from abroad a gateway to the key technology players in Finland. Tekes programmes – Tekes´ choices for the greatest impact of R&D funding Tekes uses programmes to allocate its financing, networking and expert services to areas that are important for business and society. Programmes are launched in areas of application and technology that are in line with the focus areas in Tekes’ strategy. Tekes programmes have been contributing to changes in the Finnish innovation environment for twenty years. Copyright Tekes 2011. All rights reserved. This publication includes materials protected under copyright law, the copyright for which is held by Tekes or a third party. The materials appearing in publications may not be used for commercial purposes. The contents of publications are the opinion of the writers and do not represent the official position of Tekes. Tekes bears no responsibility for any possible damages arising from their use. The original source must be mentioned when quoting from the materials. ISBN 978-952-457-521-8 Cover image: Kari Lehkonen Page layout: DTPage Oy4
  • 4. ContentsExecutive summary....................................................................................................................................................71 Background...........................................................................................................................................................9 .2 Telecommunication market as a whole........................................................................................ 103 Equipment vendors...................................................................................................................................... 184 Operators.............................................................................................................................................................. 215 Impact of technology on business................................................................................................... 256 End user preferences................................................................................................................................... 267 Regulation and recent policies............................................................................................................ 288 Key players (decision makers, industry associations, lobbyists, etc.).................. 35 .9 Barriers to trade for foreign companies....................................................................................... 3710 Bibliography....................................................................................................................................................... 39List of figures Figure.1.. Increased.bandwidth.availability.in.2008–2009...................................................11 Figure.2.. Broadband.in.Kenya:.The.value.net..............................................................................11 Figure.3.. Mobile.penetration.rate:.SIM.card.subscribers......................................................13 Figure.4.. Coverage.map,.Safaricom.(left).and.Zain.(right)...................................................14 Figure.5.. Fixed.line.subscribers.............................................................................................................14 Figure.6.. Websites.of.Kenyan.public.bodies................................................................................16 Figure.7.. Mobile.access.to.public.services....................................................................................17 Figure.8.. Market.shares.of.Kenyan.mobile.operators,.Q1.2010........................................21 Figure.9.. Fixed.lines.distribution.by.area........................................................................................23 Figure.10.. Telecommunication.market.structure.under.the.unified.. . . licensing.framework...............................................................................................................29 Figure.11.. Frequency.spectrum.fee.schedule................................................................................30 Figure.12.. Top.10.reformers.in.2007.....................................................................................................37 5
  • 5. List of tables Table.1.. Country.statistics.........................................................................................................................9 Table.2.. Telecommunication.sector:.estimated.market.penetration.rates,.. . . end.of.year.2010..........................................................................................................................9 Table.3.. Submarine.optic.fiber.networks.....................................................................................10 Table.4.. Major.network.operators.and.recent.deployments...........................................12 Table.5.. Mobile.network.operators:.Technology.information.........................................13 Table.6.. Fixed.lines.operators..............................................................................................................15 Table.7.. Main.vendors.and.recent.developments..................................................................18 Table.8.. Top.10.handsets........................................................................................................................19 Table.9.. Mobile.handset.manufacturers.......................................................................................20 Table.10.. Kenyan.mobile.operators....................................................................................................22 Table.11.. Main.Kenyan.ISPs......................................................................................................................24 Table.12.. Subscription.campaign.at.the.end.of.September.2010..................................346
  • 6. Executive summaryAlike.many.developing.countries,.Kenya. •. The.increased.bandwidth.availabili- •. The.market.for.smartphones.is.still.has.never.had.a.large.fixed.telecommu- ty,.and.the.fall.of.whole.sales.pric- small. and. represents. a. bottleneck.nications.network,.but.has.entered.di- es.pushes.operators.to.roll.out.fiber. to.the.growth.of.advanced.mobile.rectly.into.the.era.of.mobile.telephony.. backbone.networks,.and.to.invest.in. services..However,.the.recent.launch.This.characteristics.must.be.considered. wireless.broadband.access.networks. of.“cheap”.smartphones.running.An-when.trying.to.benchmark.Kenya.with. (WiMAX.networks.as.well)..Many.ISPs. droid. o.s.. represents. an. interesting.the.European.telecommunication.envi- have. transformed. themselves. into. novelty.ronments,.and.requires.the.adoption.of. second-tier.telcos..The.four.mobile. •. Government. and. the.TLC. Authori-a.different.perspective.when.analyzing. operators. have. all. obtained. 3G. li- ty.are.active.in.building.a.business.the.opportunities.for.business.and.in- censes.(one.is.already.operative.and. friendly. environment.. They. see. in.vestments.. the. others. are. rolling. out)..The. in- telecommunications.an.opportunity. There. are. several. elements. that. cumbent.is.revamping.its.network,. for.generate.economic.growth.(with.make.Kenya.an.interesting.telecommu- and.extending.on.mobile.as.well.. a.particular.attention.to.the.BPO.–.nication.environment. •. Kenya.is.an.appealing.market.for.all. Business.Process.Outsourcing)..•. A.critical.mass.of.users..With.40.mil- major.network.vendors,.whose.pres- •. A.vibrant.local.community.of.devel- lion. inhabitants,. Kenya. is. the. big- ence.is.well.established. opers. mainly. concentrated. in. the. gest.country.in.the.region.in.terms. •. In. mobile. telephony,. Safaricom. is. metropolitan. area. of. Nairobi.. This. of.population..In.addition,.there.is.a. the.leader,.but.other.operators.are. potential.has.already.been.noticed. “mobile.literate”.customer.base,.us- putting. in. place. very. aggressive. by. global. players. like. Nokia. and. ing.already.mobile.devices.for.value. strategies. to. get. market. shares,. by. Google,.which.have.decided.to.es- added.services. offering.innovative.tariffs.and.serv- tablish.their.Labs.in.the.capital..•. A. new. international. infrastructure.. ices..They.have.drastically.cut.tariffs. •. Growing. roadband. consumption. The.landing.of.three.undersea.optic. on.voice.traffic.first..Data.is.expect- and. decreasing. ARPU. are. pushing. fiber.cables.was.completed.in.2010.. ed.to.follow.soon. local.operators.to.invest.in.technolo- “Broadband.availability.is.not.an.is- •. In.broadband,.advanced.services.are. gies.that.are.cost.efficient,.and.is.of- sue.anymore”,.has.been.a.frequent. expected.to.evolve.rapidly,.both.for. fering.opportunities.to.manufactur- statement. during. the. interviews.. consumer. and. business. customer. ers,.system.integrators,.etc..Chinese. Undersea. optic. fiber. cables. made. bases,.as.well.as.for.public.and.gov- and.Israel.companies.are.already.in. it.possible.for.Kenya.to.jump.in.few. ernment.purposes.. the.front.line. months. from. an. expensive. satel- •. From.the.end.users-point.of.view,.the. •. Opportunities.for.Finnish.companies. lite.bandwidth.to.a.(for.now).10.MB. challenge.is.to.create.“light”.mobile. can.come.at.different.levels,.both.in. speed.data.traffic.. services.and.applications.enabled.to. technology.(for.example,.backbone.•. However,. the. network. is. still. quite. work.on.budget.mobile.phones,.and. and. access. networks. technology,. crowded. especially. during. peak. to. bring. added. value. at. the. same. CRM,.billing.systems,.etc.),.and.serv- times,.and.the.quality.of.the.service. time..The.example.to.follow.is.M-Pesa. ices.(with.some.attention.to.the.spe- is.not.always.at.top.level.. mobile.money.service.by.Safaricom.. cific.local.needs).. 7
  • 7. Structure of the study vendors,.the.technologies.they.provide. faricom..Chapter.5.and.6.review.the.role. to. Kenyan. operators. and. to. the. most. of.technology.and.provide.some.exam- The. study. starts. by. investigating. the. significant.projects,.as.well.as.an.over- ples.about.the.end.users.preferences. market.from.the.angle.of.the.network. view.of.the.operators. Chapter.7.focuses.on.the.regulato- infrastructure,. in. terms. of. technology,. Chapter.4.analyzes.the.role.of.ma- ry.framework.and.latest.developments. ownership,.management,.and.relation- jor.operators.and.their.most.recent.de- by.the.Authority. ships.between.the.different.players.on. velopments..In.the.past.years.they.have. Chapter.8.and.9.provides.informa- the.field.. made.large.investments.and.have.been. tion.about.important.local.key.players. The. following. chapter. 3. provides. all. 3G. licensed..There. is. an. increasing. and.the.country.friendliness.to.foreign. an. overview. of. the. main. equipment. competition,.mainly.at.expense.of.Sa- investments.8
  • 8. 1 BackgroundObjective of the study Methodology articles,.etc.),.as.well.as.independent. market.analysis.companies..Thema-This.study.is.made.for.GIGA.“Converg- The.study.has.been.conducted.by.Fin- tic.blogs.and.forums.were.also.utili-ing.Networks”.programme.of.Tekes..The. pro,. between. August. and. October. zed,.providing.fresh.insights.and.cri-aim.of.the.programme.is.to.boost.the. 2010,.in.two.parts: tical.points.of.views.Finnish.telecommunications.industry’s. a.. Desk study. Content. of. the. report. b. Interviews.. The. desk. study. was.success.and.strengthen.research.kno- was.drafted.according.to.GIGA.pro- complemented. by. phone. inter-whow.in.the.field.of.broadband.com- gramme.criteria..Main.sources.we- views. within. the. Kenyan. telecom.munications..GIGA.programme.aims.to. re. public. documents. issued. by. industry,. in. order. to. integrate. the.facilitate.international.co-operation.and. public. and. private. Kenyan. organi- report. with. more. in-depth. infor-contrbute. to. the. international. stand- zations.(annual.reports,.market.stu- mation,.and.to.validate.the.conclu-ardisation. dies,.publications,.press.releases.and. sions. The. objective. of. this. study. is. to.provide. GIGA. “Converging. Networks”. Basic informationprogramme. participants. with. an. un- Table 1. Country statistics. Source:.Finpro.Elaboration.over.different.sourcesderstanding. of. Kenya’s. telecommuni-cations.sector.and.to.give.them.a.clear. Population 39 millionview.on.whether.there.is.potential.for. Land Area 580.000 Sq KmFinns.to.enter.the.market..In.addition,. Capital Nairobithe. study. can. be. used. to. encourage. Local Currency Kenyan Shilling (KES) = EUR 0,42collaboration. between. various. Finn-ish.and.Kenyan.entities.and.companies. GDP At current price: 24,650 Billion EURthat.are.active.in.broadband.communi- Per capita: 1000cations.research.and.business.. Growth rate: 4% Government Republic Table 2. Telecommunication sector: estimated market penetration rates, end of year 2010. Source:.Finpro.elaboration.over.Paul.Budde.Communication.Report,.20101 Total number Estimated rate Fixed lines in service 260.000 0,7% Internet users 5,5 million 15% Mobile SIM subscribers 22 million 60% 1 www.budde.com.au 9
  • 9. 2 Telecommunication market as a whole International infrastructure National networks Fiber Optic National Network (former NOFBI) Until. the. arrival. of. international. sub- There.are.several.models.to.operate.the. In.order.to.prepare.Kenya.to.the.arrival. marine. optic. fiber. cables,. internation- national.networks.e.g. of.the.cable,.in.2007.the.Government. al.calls.and.Internet.traffic.were.carried. •. Some.operators.(mainly.ISPs.turned. started.the.deployment.of.NOFBI.(Na- via. satellite. at. extremely. high. costs.. into.second.tier-operators.like.KDN. tional.Optic.Fiber.Backbone.Infrastruc- Optic.fiber.brought.high.capacity.and. and. AK). deploy. and. manage. their. ture),.now.became.FONN.(Fiber.Optic. high. quality. international. bandwidth,. own.networks National.Network)..FONN.covers.5000. ending.the.dependency.on.satellite.. •. Many.utilities.sell.their.exceeding.ca- km. through. Coast,. Western,. Nyanza,. The. submarine. optic. fiber. cables. pacity.to.others. Central. and. North. Eastern. Provinces.. are.presented.in.table.3.. •. Operators.expand.their.networks.by. Contract.for.the.rolling.out.was.award- The.figure.1.shows.the.rise.in.the. signing. sharing. and. interconnec- ed.to.Sagem,.Huawei,.and.ZTE..In 2009, bandwidth.availability.due.to.the.new. tion. agreements. (business. model:. France Telecom (that controls Telkom cables. yearly. fee),. or. deploying. addition- Kenya) negotiated a deal with Kenyas al.cables.alongside.the.existing.gas. Treasury for the exclusive management and. oil. pipelines. (business. model:. and control of the network.. Under. the. fee.+.benefits.to.the.host,.e.g..con- agreement.(that.created.some.disap- nection.of.its.facilities.along.the.net- pointment. among. other. operators). work,.etc.). France. Telecom. obtained. (1). an. ex- Table 3. Submarine optic fiber networks. Source:.Finpro.elaboration.on.different.sources. TEAMS A 4500 km fiber optic cable, spearheaded by the government of Kenya. Deployment was awarded The East African to Alcatel-Lucent in October 2007 (59 MEUR contract), that began construction in 2008 and com- Marine System pleted it in June 2009. TEAMS’ shareholders are the Kenya Government, Safaricom, Telkom Kenya (20% each), UAE’s Etisalat (15%), KDN, and Essar (10%). SEACOM Cable operative since July 2009. It is a 430 MEUR privately funded venture that connects commu- nications operators in South and East Africa. SEACOM sells wholesale international capacity to global networks via India and Europe. It provides bandwidth to South Africa, Madagascar, Mozam- bique, Tanzania, and Kenya, via a protected ring structure on the continent. A second express fiber pair connects directly South Africa to Kenya. The Seacom large capacity will enable such services as high definition TV, peer-to-peer networks, and IPTV, whilst meeting the surging Inter- net demands in Africa. Essay Optic fiber cable that runs from South Africa to Sudan, with landing points in nine countries includ- Eastern Africa Submarine ed Mombasa in Kenya, and carries voice and data services. The project was partially funded by the Cable System World Bank and entered in service in July 201010
  • 10. Figure 1. Increased bandwidth availability in 2008–2009. Source:.Finpro.elaboration.over.CCK.Report 20 000 18 992 18 000 16 000 14 000 12 000 +1 236,35% 10 000 8 000 6 000 4 000 1 421 2 000 0 Dec 2008 Dec 2009 Internet bandwidth (MBps)clusive.contract.to.operate.and.main- Figure 2. Broadband in Kenya: The value net. Source:.Finpro.elaborationtain.the.network,.and.for.which.Telkom.Kenya. will. receive. a. high. fee,. and. (2). International Optic fibre backbone Infrastructure Access network gatewaya.contract.to.manage.the.commercial.operations.of.the.network.. UUNetBackbone and access networks JamboNet WWL / CDMA / Telkom Kenya (by Telkom) GSMBandwidth.availability.is.not.an.issue.an- KDN – Kenya KDN – Kenya Own WiMAXymore..Several.private.operators.are.roll- Data Network Data Network networking.out.backbone.and.access.networks,.at.both.national.and.metropolitan.levels. Access Kenya Own WiMAX network Major. players. are. Telkom,. KDN,.Wananchi,.Jamii.Telecom,.AccessKenya,. Jamii JamiiKPLC.(Kenya.Power.and.Lighting.Com-pany),.and.KPC.(Kenya.Pipeline.Compa- Own WiMAX Wananhi networkny)..They.are.deploying.their.own.optic.fiber.network,.and.signing.sharing.and. WiMAX / GSM / Safaricom 3Ginterconnection. agreements. among.them. Others Several.operators.have.invested.in.deploying.WiMax. in. the. country. and,. KPLC Kenya Power & Lighting Companyaccording.to.some.market.researches,.this.technology.is.expected.to.play.an. KPCincreasing.role2.. Kenya Pipeline Company Owned backbone Sharing agreement networks with Utilities Sagem ZTE Lucent- ABB2 BMI Kenya Telecommunications Report, Huawei Alvarion Alcatel NSN Q4 2010 11
  • 11. However,.the.point.is.controversial,. ators.(as.in.the.case.of.Safaricom’s.ac- Other. operators. clearly. adopted. and.there.are.signals.that.the.success. quisition.of.OneCom.and.its.WiMax.net- WiMax.in.a.mid-term.strategy.only..Wa- of.WiMax.is.not.definitive.–.and.not.on- work).. nanchi. has. announced. that. base. sta- ly.because.the.Quality.of.Service.(inter- Earlier. this. year,. Safaricom. an- tions.in.Mombasa.and.Nairobi.will.be. ferences). nounced.the.start.of.technical.trials.on. relocated.once.the.roll.out.of.the.net- According.to.some.industry.spec- LTE.before.the.end.of.2010,.and.express. work. in. the. metro. areas. will. be. com- ulations,.CCK.has.sold.out.all.the.WiMax. the.wish.to.obtain.some.4G.spectrum3,. pleted.. Considering. that. Wananchi. is. frequencies,. and. the. only. way. to. get. which.indicate.operator’s.development. developing. a.fiber.network. at. nation- spectrum.is.to.take.over.smaller.oper- strategies.for.the.future.. al.level,.this.may.lead.to.the.conclusion. Table 4. Major network operators and recent deployments. Source:.Elaborated.by.Finpro.from.multiple.sources Telkom Kenya 2,5 Gb/s optic fiber line between Nairobi and Mombasa launched in 2006. Telkom has later extended its network other regions, by landing the cable alongside the oil pipeline owned by KPC (by Sagem). In addition, in 2009 the operator obtained the exclusive management of the Fiber Optic National Network. KDN Rolling out of an optic fiber backbone (26,4 MEUR investment by Althech and Sameer Group - KDN’s major (Kenya Data Network) stakeholders) that will work as main backhaul for the KDN’s 80 WiMAX base stations4. In addition, KDN has invested 5 MEUR and of a data center located in Nairobi. KPLC Fiber network alongside the 1500 km electricity grid (OPGW Optical Ground Wire system). As KPLC uses (Kenya Power and only 25% of the network capacity for its internal purposes, it has been licensed for selling the exceeding Lighting Company) capacity of its 27 fiber “pairs” to other operators. Three has been rented to Wananchi, Jamii (a five-year contract for 240 KEUR/year), and Safaricom (20-year sharing agreement for 1,2 MEUR). Other 14 fiber pairs will be rented to SMEs In addition, Wananchi is rolling out its own network along the KPLC pipeline nationwide. Jamii Telcom Proprietary urban fiber rings in cities of Nairobi, Mombasa and Eldoret. In 2009, Jamii started deploying in Nairobi 50km fiber-optic cable that provides data speeds of 10Gbps (DWDM technology). The deal with KPLC provides Jamii with cross country connectivity. Wananchi Wananchi backbone network is currently under deployment in Nairobi and Mombasa. As the cable landing is taking long, Wananchi has deployed a WiMax network of 130 base stations across in the two metropolitan areas. Country connectivity is ensured by the agreement with KPLC that gives to Wananchi the access to 2000 km fiber network. Once the cable deployment in Mombasa is completed, Wananchi plans to relocate WiMax base stations in other areas of the country. Access Kenya AK started the deployment of an optic fiber network in Mombasa in 2010, to expand its already existing 140 km network. The bid went to EGMF (Enterprise Génèrale Malta Forrest). The company also claims having the largest WiMax network in Kenya. Lately, AK invested in 35 new WiMAX network base station, that provides BB and VoIP services to business (corporate and SoHo) and consumer (high-end residential) customer base, in Nairobi and Mombasa. The sister company Blue provides wireless broadband access via Motorola canopy technology (approx 3000 sq km of coverage). Safaricom Safaricom has now 140 WiMAX base stations installed. The network has been deployed in part via acquisitions (ISP OneCom and its WiMAX network in Nairobi), in part by strategic partnership with Airspan Networks (broad- band wireless systems and solutions provider) and the Israeli equipment supplier Alvarion (802.16e WiMAX net- work with a 3.5 GHz frequency band). Safaricom plan is to provide broadband to residential and corporate users, rural areas, municipalities, banks, schools, and universities, by enabling various services, including e-learning and e-government initiatives. 3 http://af.reuters.com/article/investingNews/idAFJOE62U04Z20100331 4 www.kdn.co.ke/contentview.php?id=4412
  • 12. that,.once.the.deployment.is.complet- main. competitors. Zain. (now. Bharti. ish.Company.Omnitele.for.Musimba.In-ed,.WiMax.will.be.completely.replaced.. Airtel),.Yu.(Essar.Telecom),.and.Orange. vestmements,. Safaricom. has. the. best. (France. Télécom).. In. addition,. Telkom. network. coverage,. but. lowest. quali-Mobile networks Kenya.has.deployed.a.GSM.network.to. ty,.while.Zain.has.the.best.overall.per- interwork.with.its.CDMA.network.in.the. formance5..According. to. CCK. there. are. about. 20. rural.areas.. The.quality.of. the. network. is.not.million.of.mobile.phone.subscribers.. The. networks. variy. in. terms. of. yet.at.its.highest.level,.and.the.network. There. are. four. mobile. operators:. coverage. and. performance.. Accord- can.be.quite.crowded.especially.at.peak.Safaricom. (owned. by. Vodafone),. the. ing.to.the.audit.conducted.by.the.Finn- times.. Figure 3. Mobile penetration rate: SIM card subscribers..Source:.Finpro.elaboration.over.CCK.Report 25 000 20 000 186 15 000 206 10 000 19 178 16 028 5 000 0 Dec 2008 Dec 2009 Prepaid SIM cards Postpaid SIM cards Table 5. Mobile network operators: Technology information Operator Technology Type of Infrastructure 3G status Base Stations System Vendors Safaricom GSM/ 3G/ 4G 900/1800 NSN; operative 1700 (of which (Vodafone) (trial) MHz Huawei (vendor 600 3G enabled. of choice) Zain GSM/ 3G 900 MHz NSN Commercial trial 1000* (Bharti Airtel) rolling out Yu GSM/3G 900/1800 n/a Licensed 300* Essar Telecom) MHz Orange (Telkom GSM/3G 900/1800 Ericsson Licensed, n/a Kenya) MHz Telkom Kenya GSM/GPRS/ 900/1800 Ericsson; Alcatel no 700 EDGE MHz Lucent * Zain and Essar will share 300 base stations until 2025. YU has now 100 base stations in Nairobi out of 300, but plans to expand further nationwide5 www.nation.co.ke/business/news/-/1006/685998/-/ieltebz/-/index.html 13
  • 13. Figure 4. Coverage map, Safaricom (Left) and Zain (right). Source.(Safaricom.and.Zain.websites) Fixed networks systems,.the.estimated.active.fixed.lines. 2.. CDMA.wireless.local.loop.technolo- The. number. of. fixed. lines. in. Kenya. is. will.be.260.000.in.2010,.and.280.000.in. gy.based.service,.also.provided.by. very.low..CCK.reports.less.than.one.mil- 2011.. Telkom.Kenya,.and.by.Flashcom.and. lion. of. active. fixed-lines. connections,. In.Kenya.fixed.line.service.is.pro- Popote.Wireless,.the.two.only.ope- 64.4%.of.which.are.provided.via.CDMA. vided.through.2.technologies:. rators.that.are.licensed.to.provide.fi- technology..Without.including.the.CD- 1.. PSTN-based.fixed-line.service,.by.the. xed-wireless. telephony. at. regional. MA2000.subscribers.base.and.the.WLL. Incumbent.operator.Telkom.Kenya,. level.. Figure 5. Fixed line subscribers. Source:.Finpro.elaboration.over.CCK.Report 800 672,8 700 632,7 600 500 389 429,2 400 300 200 100 243,7 243,6 0 Dec 2008 Dec 2009 PSTN Fixed line subs. CDMA Fixed wireless subs.14
  • 14. Table 6. Fixed lines operators. Source:.Finpro.elaboration.over.operators’.figures the.metropolitan.areas.of.Nairobi.and. Mombasa,.and.now.expanding.in.the. Operator Technology Type of Infrastructure CDMA metropolitan.areas.of.Naivasha.and.El- System Vendors Coverage doret..Safaricom.follows.the.Vodafone. Telcom Kenya Fixed and CDMA WLL, 800 MHz; Huawei, Countrywide strategy.of.purchasing.Mobile.internet. 1xEV-DO Rev. A Lucent-Alcatel via.USB.modem.(key).for.PC.and.laptop,. Popote Wireless CDMA2000 1X WLL, 1900 MHz Huawei Nairobi and.with.a.prepaid.business.model..The. Flashcom CDMA 1X  WLL, 1900 MHz ZTE Nairobi other.operators.will.follow.soon. IPTV and Triple Play Triple-play.is.currently.offered.only.by. Content and services Telkom. Kenya. fixed. line. and.WLL. Wananchi. and. KDT,. but.Telkom. Ken-telephony.are.only.a.part.of.the.over- Undersea. cables. have. enabled. far. ya. is. planning. to. launch. the. services.all.range.of.services.of.the.incumbent. cheaper. tariffs,. and. bandwidth. prices. as.well.(which. includes. GSM. mobile. services,. had.dropped.90%..As.a.result,.the.mar- Wananchi.launched.the.service.on.public. payphones,. Internet. backbone. ket.for.services.is.expected.to.boom6.. its.WiMAX.network.in.2008,.under.the.and. gateway. for. ISPs,. ISP,. mobile. sat- In. 2009. there. were. four. million. name. of. Zuku.. Services. is. available. in.ellite.service)..The.first.50000.custom- Kenyans.online.(over.an.overall.popu- the.area.of.Nairobi.(to.300.000.homes).ers.(in.Nairobi.and.in.the.port.of.Diani- lation.of.40.million)..Besides,.Kenya.has. and. in. Mombasa. (100.000).. In. August.Mombasa). were. connected. by. using. already.the.largest.mobile.Internet.cus- 2010.the.company.signed.a.deal.with.Lucent.WLL.equipment.tecnology..Fur- tomer.base.in.the.region,.with.2.million. Cisco,. for. the. provision. of. integrated.ther.deployment.of.the.network.was.re- subscribers7.and.a.180%.growth.rate.in. end-to-end.network.technology.solu-alized.by.Huawei..Telkom’s.CDMA.serv- a.year8.. tions. (Borderless. Networks,. collabora-ices. utilize. handsets. provided. by. ZTE,. In. this. new. scenario,. several. ad- tion.and.data.center.virtualization.so-Huawei.and.LG.. vanced.services.are.now.evolving.. lutions).that.will.allow.the.Wananchi.to. Popote. Wireless. and. Flashcom. IPTV.triple.play,.e-commerce,.and. provide.the.services.in.nine.other.coun-emerged. as. the. other. two. players. on. e-government. are. growing.. Kenya. al- tries.in.the.Region.10the.field..Popote.offering.includes.fixed- so.was.the.first.African.country.to.host. KDN.started.developing.its.triple-wireless.telephone.lines.bundled.with. Google. cache. servers.. Business. proc- play.offering.in.2005,.with.Alvarion.and.unlimited.Internet.access,.for.both.pre- ess. outsourcing. is. expected. to. devel- Alcatel-Lucent. as. technology. vendors.paid.and.postpaid.customer.base..The. op.strongly.. of.choice..In.addition.to.the.WiMax.Net-company.has.stated.it.makes.80%.of.its. In. the. mobile. arena,. Internet. ac- work,.KDN.carries.the.service.also.on.its.revenues.with.data.services..Flashcom. cess. appears. to. be. the. next. battle- ADSL2.and.meshed.WiFi.networks..KDN.provides. integrated. communication. ground.for.Kenya’s.operators..Safaricom. strategy.is.to.operate.as.a.distribution.solutions. to. various. market. segments. is.on.the.frontline.(a.93.6%.growth.al- platform.for.third.parties.and.other.con-with. a. strong. focus. on. corporate. and. ready.in.20099),.offering.3G.services.in. tent.providers.SME.customers.6 www.researchandmarkets.com/research/2dbb3a/kenya_key_statis7 www.facebakers.com/countries-with-facebook/KE8 www.synovate.com9 www.capitalfm.co.ke/business/Kenyabusiness/Safaricom-maintains-growth-path-3325.html10 www.marketwire.com/press-release/Wananchi-Group-and-Cisco-Sign-Multiyear-Contract-to-Take-Triple-Play-to-Next-Level-NASDAQ- CSCO-1298454.htm 15
  • 15. E-Government services aims.to.bring.online.all.primary.and. •. Mobile phones.. A. survey. conduct- Kenya.launched.its.e-Government.strat- secondary.schools.within.10.years.. ed.by.the.Kenya.Education.Network. egy.in.March.2004,.with.an.estimated. Some. pilots. are. currently. under- Trust. shows. how. Kenyan. use. mo- budget.of.21.MEUR..Back.in.2001,.there. going. bile.phones.to.access.a.wide.range. were. only. four. Kenyan. ministries. on- •. Digital villages..The.programme.aims. of.services:. line..Nowadays,.a.review.of.26.Ministry. to.establish.five.Digital.Villages.(‘Pa- websites.and.14.Government.Agencies. sha. Centers’). in. each. of. the. Ken- Government. uses. mobile. services. for. shows.the.follow.situation: ya’s.210.constituencies,.under.a.PPP. providing.a.large.range.of.information:. business.model..Safaricom.has.been. road.safety,.emergencies.notifications,. Access to e-government services the. first. technology. partner.. KDN. voter.registration,.representative-voter. Access.to.e-government.services.rep- joined.later,.expanding.the.network. communication,.etc. resent.a.major.challenge,.as.the.major- to.rural.areas..Cisco.also.joined.the. These.services.are.currently.deliv- ity.of.Kenyans.cannot.afford.the.cost.of. programme.. The. mobile. network. ered.in.the.form.of.SMS,.but.they.have. an.ISP.subscription.and.a.PC..Apart.the. operators. will. use. 3G. services. for. created. an. interesting. critical. mass. of. popular.Cyber.cafes,.the.citizen.access. connectivity,.Telkom. Kenya. its. CD- users,.that.has.familiarized.with.the.use. to.e-government.services.through: MA.fixed-wireless.network,.and.KDN. of.mobile.phone.as.a.tool.for.the.deliv- •. Institutional access. Government.is. teamed.up.with.fixed-wireless.oper- ery.of.e-Government.services.. connecting.900.post.offices.across. ator.Popote.Wireless. the.country..A.parallel.programme. Figure 6. Websites of Kenyan public bodies. Source:.Kenya.Education.Network.Trust.(KENET)11 Portals providing a wide range of information and support one-stop Connected 0 transactions without the need for dealing directly with different agencies Transactional 0 websites support payments or the creation/submission of information. websites include downloadable Interactive 4 forms that can be submitted offline. There is 2-ways interaction between officials and users (via e-mail and/or mobile). Enhanced 30 websites provide information about structure, functions and services of the government agencies Emerging 39 11 www.kenet.or.ke16
  • 16. Figure 7. Mobile access to public services. Source:.Kenya.Education.Network.Trust 35 30,4 30 26,9 25 20 18,3 15 10 4,2 5 2,6 1,0 0 KNEC results E-Bills Voters Loan status Clarification on Water bills registration policy issuesE-Government latest developments thority. (ERP. system). and. at. the. Immi- via. Internet. or. mobile. phones. (SMS)..In. terms. of. access. network. infrastruc- gration. Department. (mobile. tracking. The. Kenya. Institute. of. Education. (KIE).ture,. LAN. deployment. at. both. cen- systems.for.the.passports) launched.the.Curriculum.Project,.which.tral. and. local. level. must. be. complet- The.education.sector.is.one.of.the. allows.schools.to.offer.e-learning.(Cis-ed,. while. at. backbone. level,. large. da- largest.in.the.country..E-learning.initia- co. and. Microsoft. as. technology. part-ta. centers. are. under. construction.. At. tives.has.been.launched.in.some.uni- ners.)..Pilots.have.been.carried.out.in.19.back-end.level,.applications.have.been. versities.(Kenyatta.University.and.Eger- schools. across. the. country,. with. con-installed.at.central.level,.as.well.as.“criti- ton.University)..The.Ministry.of.Educa- tent.and.labs.has.been.provided.by.Bel-cal”.government.agencies. tion. has. developed. a. website. where. gian.company.Televic.Education.deliv- Some. interesting. projects. have. students.can.access.results.and.selec- ering.(the.Belgian.government.funded.been.completed.at.the.Kenya.Port.Au- tion.to.primary.and.secondary.schools. the.project.with.7,3.MEUR).1212 http://www.televic-education.com/en 17
  • 17. 3 vendors Equipment Major vendors Table 7. Main vendors and recent developments. Source:.Finpro.elaboration.over.multiple. sources All. major. vendors. have. a. presence. in. Kenya:. Alcatel-Lucent,. Ericsson,. Hua- NOKIA SIEMENS • Products and applications, for fixed, mobile, and converged wei,.Nokia.Siemens.Networks.and.ZTE.. NETWORKS networks: Radio and Broadband Access, Service Core and Applications, IP/transport, Operations and Business Software, It. seems. that. especially. the. Chinese. Services. A key product is the Subscriber Data Management vendors.are.gaining.market.share.at.the. (SDM) platform. expense.of.e.g..Alcatel-Lucent..They.are. • SDM platform deployed for Safaricom. It includes “One-NDS 8.0”, especially.strong.in.3G,.offer.lowe.price. a data management platform for the consolidation of subscriber data from multiple applications, and which is part of the levels. as. well. as. interesting. financing. Safaricom’s transition to an all-IP network. packages. • Outsourcing of Zain Mobile network operations. NSN will Vendors.do.not.have.local.produc- take over complete responsibility. A five-year contract to tion.plants,.but.operate.through.local. optimize, modernizes, and manages Zain’s multi-vendor mobile offices.. Besides. the. technology,. they. networks sites (over 3000). Besides, NSN is implementing for Zain its ‘Energy Solutions’, to reduce operating costs and power currently. provide. integration. services. consumption. Also deploying mobile soft-switching and and.are.extending.their.activities.to.the. subscriber data management solutions. management.of.networks.of.the.opera- tors..However,.for.the.moment.only.Za- ALCATEL LUCENT • “Subscriber Data Management Home Location Register Platform” in.has.opted.for.the.outsourcing,.and.it. to Telkom Kenya (three-year contract). The platform creates a is.not.clear.if/when.the.others.will.fol- subscriber profile for each customer on the GSM network of TK, and provides support for voice/data services on mobile, wireless low.. and converged networks (containing location, subscription and Local.production.of.telecommuni- authentication information). cation.equipment.is.minimal. • Triple Play Service Delivery Architecture (TPSDA) to Kenya Data Although.operators.own.multi-ven- Network (three-year contract). The infrastructure enhance voice, dor.networks,.they.usually.have.a.“ven- video and data services delivery to the KDN’s 350.000 subscribers (consumer and enterprise), and enables KDN to carry multiple dor.of.choice”.for.the.provision.the.tech- services on its nationwide IP backbone, as well as traffic from nology.which.is.strategic.for.them.. international and domestic Internet service providers and other telecommunications service providers. Further extension and upgrade of the IP/MPLS network (TPSDA-based). KDN expanded network covers now 12 metropolitan areas across Kenya, and includes Gigabit Passive Optical Networking solution (a GPON- based 7342 Intelligent Services Access Manager Fiber-to-the- User platform) as well as additional IP/MPLS service routers (7450 Ethernet Service Switch, 7750 service routers).18
  • 18. Table 7. (continued) launched.on.the.market.by.global.play- ers.like.Huawei.and.Google. ERICSSON • End-to-end 3G network solution to Orange Kenya, including Huawei. has. launched. IDEOS. (77. network design, implementation, rollout, testing and operational support (3G trials have been started in December 2009) EUR,. the. cheapest. smartphone. in. the. • GSM/GPRS/EDGE 900/1800 MHz network to Telkom Kenya (a Kenyan. market). and. U222. (Safaricom. two-year and 79 MEUR deal). Supply, installation and roll out of branded). smartphones,. both. running. all the GSM network components (BTS and switches to enable on.the.Android.operating.system.(ver- mobile services delivery), as well as equipment and services sion.2.2.–.Froyo)..There.are.several.ex- under a Build, Operate, Transfer (BOT) agreement. The new network will interwork with a CDMA-based limited mobility pectations. around. Android.. Industry. solution in the remote and rural areas of the country. rumors.say.that.Google.aims.to.market. directly. the. new. Android. phones,. to. HUAWEI • Huawei offers to Kenyan operators several mobile broadband boost.the.presence.in.Kenya14..Goog- end-to-end solutions, to help them to migrate to mobile le. also. launched. Android. Market. app. broadband networks: mobile broadband access, 150Mbps store.earlier.in.September,.making.Ken- bandwidth LTE, IP backhaul, IP + Optical backbone, packet core, smart terminals, software and applications, security and storage, ya. the. second. country. in. Africa. after. and managed services solutions Strategic partnership with South.Africa.to.get.it.. Safaricom. According. to. the. business. mod- • Huawei will be t “vendor of choice” for core network el,.third-party.developers.that.publish. requirements, and for the roll out of the 4G network (LTE applications.get.70%.of.the.revenues,. technology). Safaricom will start the technical trial of the 4G on its network by the end of 2010 (it will allow high speed of 600MB while.the.remaining.30%.is.shared.be- p/s, or 1.5G p/s, in both downloads and uploads). Safaricom tween.operators.and.“payment.proces- also partners with Huawei for implementing mobile network sors”.(Kenya’s.m-money.services.such.as. base station (called “Energy Solutions”) that combines wind, M-pesa,.Zap,.and.Yucash. solar power, and diesel, and that open opportunities to other interesting investments. Table 8. Top 10 handsets. Source:.Opera.Mobile handsets SoftwareOpera. Software. issues. a. report,. the. 1 Nokia 2330c“State.of.the.Mobile.Web”,.that.ranks.the. 2 Nokia 5130 XpressMusicTOP.10.handsets.in.Kenya.using.Opera. 3 Nokia 1680cMini.13 4 Nokia 2680s Although.this.is.a.very.partial.rank-ing,. it. shows. the. popularity. of. Nokia. 5 Nokia 2600cmodels. 6 Nokia 2700c Nokia. is. still. the. market. leader. 7 Nokia 3110cbut.competition.is.getting.fierce,.with.manufacturers.introducing.new.models. 8 Samsung SGH-E250that.target.both.low.and.high-end.seg- 9 Nokia 2630ments..Some,.low-cost.but.reasonably. 10 Nokia 6300high-end. smarthphones. have. been.13 www.opera.com/smw/2010/06/14 http://www.businessdailyafrica.com/Company%20Industry/Kenya%20gets%20low%20priced%20smartphone/-/539550/1004304/-/rf069lz/-/ index.html 19
  • 19. Table 9. Mobile handset manufacturers. Source:.Finpro.elaboration Retail distribution channels Nokia: Still largest market share, but decreasing for the competition of Dealers. play. an. important. role. in. the. The market cheaper manufacturers. The most recent countermove is the launch, leader in June 2010, of the renewed C-series phones: 4 models that target value. chain.. Safaricom. has. about. 500. mainly the low-end market (prices are 30-45 EUR), represented by dealers,.Zain.85,.Telkom.Kenya.56,.and. people who live mostly in rural areas. As many mobile users in Kenya Yu. about. 20.. The. distribution. chan- own more than one SIM card, an appreciated feature is the dual SIM nel.has.recently.gone.under.important. capabilities (on C1-00, and C2 models). Nokia also lead the market changes,.when.Mobicom,.Kenya’s.larg- of the mobile applications, with its OVI store featuring also locally developed applications. est.and.most.seasoned.mobile.and.oth- er.equipment.dealer.ended.its.9.years. Samsung: Samsung controls 15% of Kenyas market, and aims to double the partnership.with.Safaricom.in.July.2009,. The aggressive share in two years time, mostly on the expense of Nokia. At the same follower time, Samsung is strongly affected by counterfeits (over 20% of the and.contemporarily.established.chan- Samsung imported devices are fakes). This phenomenon has forced nel.relationships.with.Zain.and.Orange. the company to launch a consumer empowerment campaign against Kenya,.with.the.aim.to.expand.in.the.ru- stolen, used and counterfeit phones. Besides budget models, Samsung ral.areas.of.the.country. also target the top-end market, with its latest S8500 model (exclusively in Safaricom outlets). Samsung is also in the process of developing local applications for the Bada platform. LG: Earlier in 2010, LG announced the introduction in the Kenyan market The innovator of the LG Optimus (LG GT540) mobile phone, powered by Android Huawei: The phone manufacturer is gaining ground, due to lower prices The outsider respect to main competitors. As Kenya is a price sensitive market, the competition is becoming fierce, especially after the reduction of VAT on mobile handsets decided in the last national budget. However, Huawei has is also partnering with Safaricom for the launch of U8220 smartphone model powered by Android OS. IPhone: In 2009, Orange Kenya launched Apples iphone, but the penetration The hypes rate is very minimal and it can be considered a niche product.20
  • 20. 4 OperatorsMobile network operators Figure 8. Market shares of Kenyan mobile operators, Q1 2010. Source:.SafaricomAccording.to.the.CCK,.there.were.19,.3.million.mobile.subscribers.at.the.end.of. Yu200915: Orange 5,4% Safaricom. continues. to. be. large- 5,6%ly. the. market. leader,. controlling. over.three-quarters.of.the.market..The.others. Zainoperators.are.putting.in.place.very.ag- 10,6%gressive.strategies.in.order.to.increase.rapidly.their.market.share. Safaricom 78,3%15 www.cck.go.ke/news/2010/news_30mar10.html 21
  • 21. Table 10. Kenyan mobile operators. Source:.Finpro.elaboration Public company, whose majority share is controlled by Vodafone. Customer base is mainly in the metropolitan areas of Nairobi, Mombasa, and other big towns of Kisumu and Nakuru. Safaricom is the only operator with both a WiMAX and 3G networks. www.safaricom.co.ke Network includes 2000 base stations16 (600 of which 3G), and 140 WiMax. Major technology partners are NSN and Huawei. Its network covers 80% of the Kenyan population. Recent developments include the implementation of “Energy Solutions” base stations, which combines wind, solar power, and diesel in order to reduce operating costs and power consumption. Safaricom’s most famous service is the popular M-PESA, mobile banking service that allows users to transfer money via SMS, without the subscription of a bank account. It also enables mobile phones to function as an e-wallet (up to 70000 KES, about 600 EUR). Vodafone is now planning to roll out M-PESA service in other countries. Another popular service is “Kipokezi” launched in May 2010, an SMS based service that enables users to send and receive email and online chat from any phone Acquired by Bharti Airtel of India in June 2010, and rebranded in October. Over 250 MEUR invested in improving data traffic performance. Management and upgrade of the network is outsourced to NSN (including the management of over 3.000 multi-vendor cellular sites, and the implementation of NSN’s ‘Energy Solutions’, as well as deploying mobile soft-switching and subscriber data management solutions) www.ke.zain.com In summer 2010 Zain started an aggressive pricing policy on voice traffic that forced other operators review all their tariffs. Zain is currently testing 3G services. It also offers a mobile banking service similar to M-Pesa, called Zap. It allows subscribers to send or receive money, make purchases, carry out bank transactions. Zap is available in all countries where Zain operates. Commercial brand of France Télécom (that also acquired Telkom Kenya, and it is now revamping its EGDE network). Orange is the only operator to offer fixed, mobile (GSM and soon 3G), and Internet integrated services. orange™ Coverage is currently limited to the metropolitan areas of Nairobi and Mombasa, but planning to www.orange.co.ke double the customer base in one year (1,5 million subscribers). Orange is the only operator to offer a iPhone as a “branded phone”. Launched in November 2008, Yu is Kenya newest mobile network operator. It is owned by Essar Telecom Kenya Limited (ETKL), a subsidiary of Indian based Essar Group. Access network technology includes about 500 base stations. More recently, Yu signed and www.yu.co.ke agreement with Zain for sharing their networks. YU announced that it had achieved its goal of nationwide coverage for its mobile network in August 2009. Yu mainly focuses on the lower end of the market, capturing new mobile users entering the market for the first time, as well as disloyal subscribers from other networks that are looking for a better deal. Besides voice and SMS services, Yu offers yuCash ( mobile money transfer service), Eneza (electronic mobile top-up), Dunda (ringback tones), and MMS 16 www.safaricom.co.ke/index.php?id=112122
  • 22. Fixed line operators scribers. of. fixed. line. and. fixed-wire- phone.lines.has.been.growing.since.the. less. services. (where. 64.4%. of. the. ac- start.of.2009;.this.is.likely.a.reflection.of.CCK’s. figures. show. how. the. growth. tive.fixed-line.connections.are.via.CD- the.investments.that.Telkom.Kenya.has.of. the. fixed-lines. is. declining. further;. MA-based. fixed-wireless. technology,. been.directing.towards.this.segment.of.even.though.the.decrease.is.compen- provided. by. incumbent. Telkom Ken- the.market..Around.47.5%.of.traditional.sated.for.by.the.growth.in.the.number. ya (Orange),.as.well.as.by.the.regional. fixed.lines.in.Kenya.are.owned.by.resi-of. fixed-wireless. connections.. At. the. local.loop.operators,.Flashcom and Po- dential.customers,.with.the.rest.belong-end. of. 2009. there. were. 672.945. sub- pote Wireless..The.number.of.rural.tele- ing.to.business.customers. December 2008 December 2009 Total subscribers 243.741 247.971 Urban areas: 237.142 240.533 Rural areas: 6.599 7.439 Business lines: 127.747 130.185 Residential lines: 115.994 117.787 Source: Finpro elaboration over CCK and BMI figures 90%.of.the.fixed.lines.are.installed.in.urban.areas,.55%.in.the.metropolitan.area.of.Nairobi: Figure 9. Fixed lines distribution by area. Source:.Finpro.elaboration.over.CCK.Report Rural areas 10% Other urban Nairobi Metro areas area 22% 55% Mombasa Metro area 13% 23
  • 23. Internet service providers At.the.end.of.2008,.there.were.127.ISP. licensed.by.CCK,.although.50.only.are. actually. operating..The. latest. figure. is. confirmed. by. Tespok. (Telecommuni- cations.Service.Providers.Association.of. Kenya).17 Table 11. Main Kenyan ISPs. Source:.Finpro.elaboration Wananchi Online Largest ISP in the local market, with about 38% market share. In 2003 it launched a www.wananchi.com mobile Internet and email service in partnership with Safaricom. Agreement has been extended in 2006, to include GPRS and EDGE services that were offered to customers with a post-paid business model. In 2009 and 2010, Wananchi signed two separate agreements with KPLC to access its backbone network. Africa Online Kenya With about 30% of market share, AfOL operate as a “traditional” ISP. In 2006, it launched www.africaonline.co.ke InfiNet Broadband, an iBurst wireless broadband service with three base stations (by Kyocera) in Nairobi. AfOL connect to UUnet for international connectivity, via KDN backbone network. Service is now extended to the metropolitan area of Nairobi. Access Kenya AK is specialized in serving the corporate market (about 40% of the segment). In 2005, www.accesskenya.com the company launched a service called Broadband Max that was very successful thanks for its performances. VoIP service is also provided. Sister company “Blue” holds a local- loop licence and has a network that covers and area of 3000 sq km. UUNet Kenya UUNet is manly a provider of backbone services to other ISPs. Besides, the operator www.uunet.co.ke also provides dial-up, leased line, VSAT and web hosting services, as well as business solutions. Nowadays the offering includes video conferencing services (in partnership with Sony) Swift Global With PoPs in three major metropolitan areas, Swift Global is an ISP providing a range of www.swiftglobal.co.ke corporate and SMEs services, including VoIP and VPNs. Swift and Zain interconnected their networks to provide Internet access to mobile subscribers. Internet Solutions Kenya Provider of Internet services and web solutions to a business corporate base. www.isolutionskenya.com Connection agreement with UUNet. 17 www.tespok.or.ke24
  • 24. 5 Impact of technology on businessUndersea.cables.roll.out.brought.pos- IHub,.Nairobi’s.Innovation.Hub.for. In.order.to.do.this,.iHub.has.started.itive. effects. over. the. whole. Kenyan. the. technology. community,. offers. an. several.partnerships.with.global.players.economy.. The. availability. of. broad- open. workspace. with. 10MB. connec- like.Microsoft,.Google.(that.has.opened.band.connections.at.cheaper.price.has. tion. and.Wi-Fi,. to. entrepreneurs,. web. in.Nairobi.its.first.office.in.the.Region),.led. to. the. rapid. growth. of. a. dynam- and.mobile.developers.and.designers.. and. Nokia.. In. September. 2010,. iHub.ic.local.community.of.developers.and. iHub.also.operates.as.investor,.VC,.and. was.selected.as.one.of.the.two.African.innovative. entrepreneurs,. in. mobile. incubator..iHub’s.motto.is.“Make.busi- Regional. Mobile. Application. Labs,. as.and.web.field,.whose.main.character- ness.for.social.change".. part.of.Nokia.and.Finnish.government.istics.are.collaborative.spirit.and.social. The.community.of.Kenyan.devel- programme.“Creating.Sustainable.Busi-consciousness..The.start-ups.are.quite. opers. believes. that. the. new. technol- nesses.in.the.Knowledge.Economy”18.small,.and.often.brought.forward.at.the. ogies.can.help.to.solve.problems.and. The.lab.aims.to.boost.competitive-sparetime.and.with.family.money.of.the. help. the. development. of. Africa,. im- ness.of.innovative.enterprises.working.entrepreneurs. proving. education,. healthcare,. trans- in.mobile.content.and.applications. The.city.of.Nairobi.aims.to.become. ports,.etc..Another.pattern.of.the.local.a.technological.pole.in.sub-Saharan.Af- entrepreneurs.is.the.high.vocation.to.an.rica,.and.iHub.(www.ihub.co.ke).is.an.ex- international.growth.ample.of.this.“digital.revolution”..18 http://www.infodev.org/en/Article.592.html 25
  • 25. 6 user preferences End In.Africa,.the.use.of.mobile.phones.dif- VAS.in.Africa..The.market.leader.is.M-PE- example.comes.from.KACE.(Kenya.Ag- fers.from.Western.countries..The.market. SA,.the.mobile.money.service.provided. ricultural.Commodity.Exchange),.which. is. characterised. by. services. like. mon- by.Safaricom..With.over.9,5.registered. provides.crop.growers.with.up-to-date. ey.transfer,.agricultural.services.(price,. users.in.June.2010.(without.consider- commodity.information.via.SMS,.allow- weather. services). etc.. Businessmen,. ing.the.millions.who.are.benefitting.the. ing.farmers.to.access.daily.fruit.and.veg- farmers,. and. workers. are. coming. up. funds. received. from. registered. users),. etable.prices.from.a.dozen.markets..A. with.original.solutions.for.their.needs.. the.systems.registered.in.2009.person. further. example. is. M-Kulima,. an. SMS. From. the. content. point. of. view,. to.person.transactions.for.the.monthly. based. application. for. the. milk. buying. the. main. challenge. is. to. create.“light”. value.of.221.MEUR..The.service.is.pro- and.selling.process.between.the.farm- mobile. services. and. applications. that. vided. through. a. nationwide. network. ers.and.the.milk.buyer..With.the.applica- can. work. on. low-end. mobile. phones. of.over.13.000.agents,.which.cover.al- tion,.a.milk.agent.can.send.the.amount. models.and.that.can.bring.a.real.add- so.the.rural.areas..Besides.M-PESA,.other. of.milk.collected.from.a.farmer.to.a.re- ed.value.service.to.the.users..Kenya.is. services.are.getting.popularity,.namely. motely.accessed.database.. positioning.itself.strategically.in.antici- Zap.by.Zain,.and.Obopay,.by.the.Ken- pation.of.a.boom.of.web.and.mobile. ya’s.smallest.operator.YU.(with.Nokia.as. Micro employment services.market.. main.technical.partner)..Currently,.Za- Market.is.still.dominated.by.budg- in.seems.to.be.the.fiercest.competitor.. www.txteagle.com20. is. a. service. that. et.models,.but.some.smartphones.are. Zap.services.are.available.to.subscribers. enables. mobile. phone. subscribers. getting.market.shares.in.the.metropoli- across.all.of.Zain’s.22.markets..Further- to. earn. money. and. accumulate. sav- tan.areas,.where.younger.people.show. more,.thanks.to.partnerships.with.inter- ings.by.completing.simple.micro-tasks. appreciation.for.such.features.like.touch. national.and.regional.banks,.Zain.cus- for. large. corporate. clients. (as. trans- screen.. Kenya. is. a. pre-paid. SIM. cards. tomers.will.also.be.able.to.manage.their. lations. and. surveys. for. corporations),. market.(popular.both.in.the.consumer. accounts.via.mobile.. that. pay. them. either. in. airtime. or. M- and.business.segment). Pesa.. The. service. was. originally. con- Below,.in.no.particular.order,.some. Access to market information ceived. as. a. mechanism. to. compen- examples. of. interesting. mobile. solu- through mobile phones19 sate.nurses.in.rural.areas.of.Kenya..The. tions. SMS-based.system.connected.rural.dis- The.service.provides.rural.communities. trict. hospitals. with. centralized. blood. Mobile banking with. valuable. information.. For. exam- banks,.and.nurses.were.compensated. ple,.fishermen.check.the.local.fish.mar- via.automatic.airtime.transfers.to.pro- Mobile.banking.services.currently.rep- ket.prices.on.their.phones.to.determine. vide. updates. about. the. blood. supply. resent. the. biggest. success. stories. of. where.to.bring.the.day’s.catch..Another. levels. in. effort. to. halt. an. alarming. in- 19 www.encorewiki.org/display/encore/Kenya+Agricultural+Commodity+Exchange+Limited+(KACE) 20 http://springwise.com/telecom_mobile/txteagle/26
  • 26. crease.of.blood.shortages.in.rural.hos- PesaPal.launched.a.school.fee.payment. Ushahidi (www.ushaidi.com): Prob-pitals.across.Kenya..TextEagle.uses.text. programme.called.SchoolPay,.which.al- ably.one.of.Kenya’s.biggest.success.sto-messages.or.a.low.bandwidth,.interac- lows. schools. to. manage. mobile. pay- ries,.Ushahidi.is.a.crowdsourcing.plat-tive.protocol.known.as.USSD.(typically. ments.. form.created.by.iHub.for.the.manage-used.to.check.prepaid.phone.balances),. Whive (www.whive.com):.It.is.a.mo- ment.of.information.in.emergency.sit-and.it.is.now.shifting.from.simple.serv- bile.social.network.platform.where.us- uations.. It. was. developed. in. the. af-ices.(for.example.phone.menus.trans- ers. share. events,. ringtones,. games. termath. of. the. disputed. Kenyan. elec-lation.from.over.15.local.languages.to. and. SMS. messages. between. mem- tion.of.2007,.where.it.was.used.in.con-English,.made.for.Nokia).to.more.profit- bers.. Developers. behind. Whive. have. junction.with.Google.Maps.to.identify.able.segments.(medical.transcriptions,. now. released. new. applications. with. hotspots. of. ethnic. tension,. and. since.an.estimated.market.of.more.than.10. a.social.content:.iKatiba.(a.mobile.app. then.it.has.received.global.recognition.billion.EUR,.which.is.currently.dominat- launched.during.the.Kenya’s.Constitu- (after. it. was. used. extensively. during.ed.by.outsourcing.to.India).. tional. referendum,. that. translates. the. rescue.operations.following.the.Haitian. proposed. constitution. into. 8. ethnic. earthquake).Mobile-web solutions21 languages).and.a.SMS.e-health.service. (by. sending. an. SMS,. the. user. will. be.PesaPal (www.pesapal.com):.PesaPal.is.a. able.to.know.the.location.of.the.clos-payment.gateway.that.aggregates.mo- est.healthcare.center.-.particularly.use-bile,.bank.and.web.payments..Recently,. ful.in.the.slums)..21 http://memeburn.com/2010/08/20-kenyan-start-ups-worth-watching/ 27
  • 27. 7 Regulation and recent policies Frequencies spectrum and The. new. licenses. are. technology Licensing procedures and post- and service neutral,.and.allow.the.opera- licensing issues licenses tors.to.offer.fixed,.mobile,.terrestrial,.and. Once.an.application.is.accepted,.it.un- In. Kenya,. the. services. requiring. fre- satellite.services..An.investor.may.be.is- dergoes.to.the.publication.in.the.Kenya. quency.licenses.include.TV.and.FM.ra- sued.with.multiple.commercial.licens- Gazette.in.accordance.with.the.law,.and. dio.broadcasting,.cellular.mobile.tele- es. under. a. single. name. (by. maintain- the.applicant.is.advised.by.CCK..From. communications,. satellite. communi- ing.separate.accounts.for.each.license).. the. date. of. issuance,. the. applicant. is. cations,.aeronautical.and.maritime.ra- given.a.maximum.of.six.months.to.take. dio.services,.as.well.as.emergency.and. Requirements up.the.offer.and.12.to.put.it.into.opera- disaster.communication.services..All.ra- tion..All.electronic.communications.sys- dio.communication.equipment.in.Ken- All. applicants. for. commercial. licens- tems.must.be.approved.by.CCK.before. ya.must.be.owned.and.operated.under. es.should.meet.the.following.require- being.activated,.and.all.networks.must. a.license,.kept.in.force.by.the.payment. ments: be.inspected.before.being.put.into.op- of.a.fee. •. Be.registered.in.Kenya.as.a.compa- eration.. Commercial. communications. ny,.sole.proprietor.or.a.partnership.. licenses.cover.authorization.for.setting. Unified licensing framework •. Have. a. duly. registered. office. and. up. systems. and/or. providing. services. permanent.premises.in.Kenya.. to.third.parties..These.licenses.are.not. CCK. manages. the. frequency. spec- •. Provide.details.of.shareholders.and. tied.to.any.rollout.resources.such.as.ra- trum,. and. license. all. communications. directors. dio. spectrum,. numbering. (including. systems. and. services. in. the. country.. •. Provide. evidence. of. compliance. ENAM).and/or.way-leaves. In.2008,.CCK.introduced.a.new.simpli- with.tax.requirements.. fied. Unified Licensing Framework (ULF),. •. To.have.at least 20% local sharehold- which.has.reduced.the.number of licens- ing. on. or. before. the. end. of. three. es.from.40.to.only three:. years.after.receiving.a.license. 1.. Network.Facilities.Provider. 2.. Application.Service.Provider. Staring.from.August.2009,.the.20%.re- 3.. Content.Service.Provider striction. has. been. removed,. allowing. foreign.investors.to.start.with.100%.for- eign.ownership,.instead.requiring.30%. of.the.equity.to.a.Kenyan.shareholder. within.three.years...(See.Figure.10)28
  • 28. Figure 10. Telecommunication market structure under the unified licensing framework. Source:.CKK Market segments Licence period Licence Initial licence fee Annual operating fee (yrs) application fee 1 National network facilities providers 1a TIER 1 15 years KSh. 10,000 KSh. 15 Million 0.5% of Annual Gross Turnover or KSh 5 million whichever is higher 1b TIER 2 15 years KSh. 10,000 KSh. 15 Million 0.5% of Annual Gross Turnover or KSh 1 million whichever is higher 1c TIER 3 15 years KSh. 10,000 KSh. 200,000 0.5% of Annual Gross Turnover or KSh 200,000 whichever is higher 2 International network facilities providers 2a Submarine Cable Landing Licence 15 years KSh. 10,000 KSh. 15 Million 0.5% of Annual Gross Turnover or KSh 5 million whichever is higher 2b International Gateway Licence 15 years KSh. 10,000 KSh. 15 Million 0.5% of Annual Gross Turnover or KSh 5 million whichever is higher 3 Non-infrastructure based service providers 3a Applications Service Providers 15 years KSh. 10,000 KSh. 100,000 0.5% of Annual Gross Turnover or KSh 100,000 whichever is higher 3b Content Service Providers 15 years KSh. 10,000 KSh. 100,000 0.5% of Annual Gross Turnover or KSh 100,000 whichever is higher 4 Terminal equipment providers 4a Telecommunications Terminal 15 years KSh. 1,000 KSh. 15,000 KSh. 6,000 Equipment Contractors 4b Telecommunications Technical 15 years KSh. 500 KSh. 2,000 KSh. 500 Personnel 5 Private very small aperture terminals (VSAT) 5a Operated Through Vsat Hub 15 years KSh. 1,000 N.A. KSh. 6,000 per VS AT Terminal Operators Licensed in Kenya 5b Operated Through Foreign Vsat 15 years KSh. 1,000 N.A. KSh. 200,000 per VS AT Terminal Hub Operators 6 One time authorisation 6a GMPCS Landing Rights 15 years KSh. 10,000 US$ 12,500 Not applicable Authorization 6b Business Process Oursourcing Open KShs 10,000 (Registration fees) Not applicable 29
  • 29. Dedicated wireless access systems networks.in.Nairobi,.Nakuru.and.Nyeri.. mission.to.avail.30.MHz.bandwidth.of. to government bodies The.aim.is.to.enhance.communication. 3G.frequencies..The.subscribers.previ- among.security.agencies..The.Commis- ously.on.the.CDMA.1.9.GHz.were.mi- In.2008,.CCK.assigned.to.Government. sion.recovered.CDMA.1.9.GHz.frequen- grated.to.the.new.wireless.platform.us- Security. Agencies. the. wireless. access. cies. from. three. Local. Loop. Operators. ing. the. CDMA. 800. MHz. system.. (See. frequencies.in.the.380–400.MHz.band. (LLO).and.migrated.Telkom.Kenya.from. Figure.11) for.the.trunked.radio.network,.to.deploy. the.same.frequency,.enabling.the.Com- Figure 11. Frequency spectrum fee schedule. Source:.CKK Service Description Annual fees per station per frequency in Kshs. MF/HF VHF/UHF 1. Aeronautical station A licence to establish a radio station for carrying Ksh. 4,800 Kshs. 4,800 licence radiocommunication with aircraft station 2. Aircraft station A licence to establish a mobile station abroad an aircraft, Ksh. 4,800 Kshs. 4,800 licence to operate in the aeronautical mobile service 3. Licence for fixed A licence to establish a radiocommunication station at a fixed Ksh. 18,700 Ksh. 5,000 station operating in location for carrying on a mobile radiocommunication service mobile service 4. Mobile station A licence to install and use radio apparatus for transmitting Ksh. 5,610 Ksh. 2,900 licence and receiving aboard a vehicle, aircraft, or a ship 5. Portable station A licence to a portable radio communication apparatus to Ksh. 5,610 Ksh. 2,900 licence operate in the mobile service 6. Coast station licence A licence to establish a station on land for carrying on Ksh. 18,700 Ksh. 5,000 a radiocommunication service with ship stations 7. Ship station licence A licence to install and use radio apparatus aboard ships Ksh. 5,610 Ksh. 2,900 8. Maritime mobile N/A N/A N/A service identity 9. Radio amateur A licence to install and operate an amateur radio station Ksh. 2,000 Ksh. 2,000 licence 10. Citizen band radio A licence to operate a low power radio apparatus operating One time licence fee N/A licence in the frequency bands 26925 KHz to 27403 KHz of Ksh. 1,000 11. Family radio No licence required for band 446.0–446.1 MHz N/A N/A 12. Private paging A licence to operate a radio paging service for private use N/A Ksh. 25,000 service 13. Public paging service A licence to operate a radio paging service for public use N/A Ksh. 140,000 (base station) 14. Radio press reception A licence to a radio station to recieve press messages from Ksh. 10,000 Ksh. 10,000 licence stations transmitting multi-destination radio press messages30
  • 30. Figure 11. Frequency spectrum fee schedule (continued). Source:.CKK 15. Alarm systems The basic charge for each alarm unit is Kshs 1250, but the specific charges for each particular customer is determined by using the maximun value in each grouping of 5; 5 for 1-5; 10 for 11-15, etc. 16. Fixed satellite earth stations The fee payable for fixed satellite earth stations is commensurate with the power and the occupied bandwidth, and is calculated on the basis of these parameters using the following formula:  P (watts )  (Ptot −1000)   BW (kHz )  = K t log10 nom  + K 2 log10 x x 574.10  25 watts 25 watts   8.5 kHz   where: K1 . = . 1 for the first 1 kW of radiated carrier power K2 . = . 0.2 for additional power above 1 kW 25 watts. is the maximum power allowable for VHF base stations 8.5 kHz. is maximum allowable RF bandwidth for VHF base stations Pnom is. the nominal transmitter power Ptot . . is.the effective isotropically radiated power BW . . is the width of frequency band that is just sufficient to ensure the transmission of information . . at a rate and with the quality acceptable under specific conditions. 17. Broadcasting stations The fee payable for broadcasting stations will be charged as per the table below depending on the amount of ERP power. The application for broadcasting fees is Kshs 1,000. The flat rate fees for each category of ERP power are specified for ERP powers up to 10kW. Service Amount in Kshs. ERP Power Conditions TV broadcasting 360,000.00 ERP Power £ 10KW As per formula below subject ERP Power > 10KW to a minimum of Kshs. 360,000 Radio broadcasting 30,000.00 ERP Power £ 2KW 65,000.00 2KW < ERP Power £ 5KW 130,000.00 5KW < ERP Power £ 10KW As per formula below subject ERP Power > 10KW to a minimum of Kshs. 130,000 18. Terrestrial Unks (Fixed Station Licence) This is a licence to establish a radiocommunication station at a fixed location for carrying on a Fixed Radiocommunication Service to provide a public service. This category of licence is drawn for radio stations used to interconnect two specified fixed points. The fee payable for this licence is based on the occupied bandwidth, and is calculated using the following formula: The fee, F, (Kshs.) per transmitter per location is:  RFbandwidth (kHz )   Number of  F=  x K1 x Unit fee  8.5 kHz  RF channels  574.10, as Kshs.574.10 is the unit spectrum fee for a 8.5 kHz band. 31
  • 31. Figure 11. Frequency spectrum fee schedule (continued). Source:.CKK 19. Cellular Mobile Networks This is a licence to establish a fixed radio station to operate Mobile Cellular Radio service. 19.1. Exclusive Spectrum Bandwidth Assignment fee This is applicable to cases that have been assigned exclusive use of a specific bandwidth countrywide. This standing fee is to be paid annually for exclusive use of the bandwidth, in addition to the usage fee that is detailed in item 19.2 below. Annual fee, Fn, for exclusive spectrum bandwidth assignment is: Assigned bandwidth (kHz ) x Weighting factor x 1043.65 Fn (KShs ) = 8.5 kHz where: Weighting factor to be used = 6 Unit fee = Kshs. 1043.65 19.2 Spectrum Usage fee This is based on actual usage of the spectrum, and depends on the number of TRXs in the network. Fee Fu (KShs.) = 43,000 x n where, (i) n is the actual or equivalent number of 200kHz dplex TRXs estimated to be in use at the end of the year in review (ii) Annual Spectrum Management cost on one TRX is Kshs. 43,000 20. Fixed Wireless Access Networks This is a licence to establish a fixed radio station to operate Fixed Wireless Access. 20.1 Exclusive Spectrum Bandwidth Assignment fee This is applicable to cases that have been assigned exclusive use of a specific bandwidth countrywide. This standing fee is to be paid annually for exclusive use of the bandwidth, in addition to the usage fee that is detailed in item 20.2 below. Annual Fee for exclusive spectrum bandwidth assignment is calculated as follows: Assigned bandwidth (kHz ) x Weighting factor x 1043.65 Fn (KShs ) = 8.5 kHz where: Weighting factor to be used = 6 Unit fee = Kshs. 1043.65 20.2 Spectrum Usage fee This is based on actual usage of the spectrum, and depends on the number of TRXs in the network. Fee Fu (KShs.) = 100,000 x n x K1 where: n = the actual or equivalent number of 1.75MHz duplex TRXs estimated to be in use at the end of the year in review. Annual Spectrum Management cost of one TRX is KShs. 100,000 Weighting factor, K1 = 0.8, for f < 1 GHz . . . =.0.7, for 1 GHZ £ f < 6 GHz . . . =.0.6, for 6 GHZ £ f < 10 GHz . . . =.0.5, for 10 GHZ £ f < 20 GHz . . . =.0.4, for f ³ 20 GHz32
  • 32. Figure 11. Frequency spectrum fee schedule (continued). Source:.CKK 21. Terrestrial point to multipoint fixed Links (eg. LMDS backhaul links) The fee is based on actual usage of the spectrum, and depends on the number of transmitters (TRXs) in the network and their respective bandwidths. Fee Fu (KShs.) = 100,000 x n x K1 where: n = the actual or equivalent number of 1.75MHz duplex TRXs estimated to be in use at the end of the year in review. 100,000 - Annual Spectrum Management cost of one TRX in Kshs. K1 . = Weighting factor, K1 . = 0.8, for f > 1 GHz . =.0.7, for 1 GHZ £ f < 6 GHz . =.0.6, for 6 GHZ £ f < 10 GHz . =.0.5, for 10 GHZ £ f < 20 GHz . =.0.4, for f ³ 20 GHz Note: f is the frequency band in GHz 22. Trunked Network (Mobile Trunked Radio Licence) This is a licence to operate a trunked radio network. 22.1 Exclusive Spectrum Bandwidth Assignment fee This is applicable to cases that have been assigned exclusive use of a specific bandwidth countrywide. This standing fee is to be paid annually for exclusive use of the bandwidth, in addition to the usage fee that is detailed in item 22.2 below. Annual fee for exclusive spectrum bandwidth assignment is calculated as follows: F. (KShs) Assigned bandwidth (kHz ) x Weighting factor x 1043.65 Fn (KShs ) = 8.5 kHz Where: Weighting factor to be used = 6 Unit fee = Kshs. 1043.65 22.2 Spectrum Usage fee This is based on the actual usage of the spectrum, and depends on the number of TRXs in the network. Fee Fu. (Kshs) - 43,000 x n x K1 Where: n = the actual or equivalent number of 25KHz duplex TRXs estimated to be in use at the end of the year in review. Annual Spectrum Management cost of one 25KHz duplex transmitter is Kshs. 43,000 33
  • 33. Latest policy developments 200.per.port..Number.portability.serv- ed.the.deadline.twice,.as.a.large.share. by the CCK ice.in.the.country.will.be.provided.by. of.subscribers.snubbed.it..At.the.end.of. M/s.Porting.Access.BV,.the.Dutch.com- September2010,.only.12.4.million.mo- Interconnection pany.that.won.tine.international.tender. bile.subscribers.had.registered.their.SIM. In. August. 2010,. CCK. reduced. mobile. (61.6%)..The.registration.campaign.will. interconnection. rates. with. 50%. (from. Compulsory SIM card registration definitely.reshape.the.market.figures,.as. 4,42.to.2,21.KSH.per.minute)..Rates.will. CCK. started. the. compulsory. registra- the.unregistered.SIM.cards.will.be.dis- progressively.decline.by.35%,.20%.and. tion.campaign.in.order.to.keep.under. connected.by.their.network. 15%.annually.in.2011,.2012.and.2013.re- control.the.rising.number.of.crimes.per- spectively.to.stand.at.Kshs0.87.by.2014.. petrated. via. mobile. phones. (kidnap- 3G licenses Although.the.commission.opted.for.a. ping,. frauds,. hate. crimes,. and. terror- After.several.demands.presented.by.the. three-year.glide.path.for.the.reduction,. ism),.and.it.applies.to.both.existing.SIM. operators,.in.June.2010.the.Authority.fi- considering.it.potentially.disruptive,.the. cards.and.to.those.customers.who.buy. nally.decided.to.reduce.3G.license.fee,. mobile.operators.immediately.put.the. SIM. cards. for. the. first. time..The. cam- whose.cost.was.considered.prohibitive. reduction.in.operation.. paign. was. supposed. to. be. complet- and.that.served.as.a.barrier.for.the.roll. ed.by.June.2010,.but.CCK.has.extend- out.3G.networks. MNP Mobile Number Portability By. the. end. of. 2010,. mobile. phone. Table 12. Subscription campaign at the end of September 2010. Source:.Finpro. elaboration.over.CCK.figures subscribers.will.be.able.to.retain.their. numbers.whenever.they.change.serv- Registered SIMs (million) SIM subscribers (million) ice.providers..CCK.expects.that.number. Safaricom 13.80 16.24 portability.will.boost.the.level.of.com- petition. in. the. market. and. enhance. Zain 1.93 2,80 consumer.choice..Subscribers.porting. Yu 0,600 1.5 their. numbers. to. a. different. network. Orange 0,386 0,552 will. pay. a. one-time. fee. of. about. KSH.34
  • 34. 8 Key players (decision makers, industry associations, lobbyists, etc.)Ministry of information and •. Type-approving.communications. •. Advice.the.government.on.all.rele-communications equipment vant.matters.pertaining.to.develop-www.statehousekenya.go.ke/govern- •. Managing.the.radio.frequency. ment,.coordination.and.promotion.ment/information.htm spectrum. of.ICT.industries.in.the.country.Ministry’s.mission.is.to.facilitate.ICT.de- •. Formulating. telecommunication. •. Partner.with.agents.within.and.with-velopment.in.Kenya,.in.order.to.let.the. numbering.schemes.and.assigning. out. the. country. to. carry. out. such.country.develop.into.a.center.of.excel- them.to.network.operators;.and.Im- functions.as.it.may.consider.neces-lence.in.ICT..The.ministry.is.in.charge.-. plementing. universal. service. obli- sary.among. other. things-. of. the. following. gation. •. Transform. and. empower. society.policies:.Information,.Communication,. through.deployment.and.use.of.ICT.Film. and. Film. Industry. Development,. CCK.is.also.involved.in.encouraging.lib-National.Communications.Capacity.De- eralization.and.inviting.foreign.invest- The.goals.of.the.Kenya.ICT.Board.are:velopment,.Kenya.Broadcasting.Corpo- ment.into.the.Kenyan.telecommunica- •. Boost.ICT.connectivity.in.the.coun-ration,. Board,. Communications. Com- tions.industry..CCK.is.guided.by.a.policy. trymission.of.Kenya,.Telkom.Kenya.Limit- goal.to.ensure.that.by.2015.telephone. •. Improve.service.delivery.to.citizens.ed.(minority.share). services.are.provided.nationally.under. •. Increase. type. and. quality. of. infor- a.universal.service.obligation.scheme.. mation.from.and.to.the.citizens.In-Communication commission of crease. the. governments. ability. to.kenya – cck Kenya ICT Board ensure.transparency.www.cck.go.ke www.ict.go.keCCK.was.established.in.1999.with.the. Kenya. ICT. Board. is. the. State’s. imple- iHUB open spaceKenya.Communications.Act,.to.license. menting. Agency. in. charge. of. the. fol- www.iHub.co.ukand. regulate. telecommunications,. ra- lowing.mandate: iHub.is.an.open.space.with.for.the.de-dio.communication.and.postal.services. •. Promote. both. locally. and. interna- velopers,.investors,.tech.companies.and.in.Kenya..CCK.is.in.charge.for: tionally.the.opportunities.for.invest- white.hackers.in.the.area.of.Nairobi..It.•. Licensing.(telecoms.and.postal/ ments.in.ICT.technology is.a.community.facility.with.a.focus.on. courier).operators. •. Facilitate.and.manage.ICT.industri- young.entrepreneurs,.web.and.mobile.•. Regulating.tariffs.for.monopoly.. al.incubation.parks.and.technology. phone.programmers,.designers.and.re- areas. parks.together.with.associated.facil- searchers..It.operates.as.open.commu-•. Establishing.interconnection.. ities.on.sites,.estates.and.land nity.workspace,.as.well.as.a.hub.for.in- principles. vestors.and.VCs.and.as.an.incubator.. 35
  • 35. NAILAB Nokia Research Center Nairobi G-Kenya www.nailab.co.ke http://research.nokia.com/research/labs/ http://sitescontent.google.com/gkenya/ Incubator.for.ICT.start-ups.and.SMEs.lo- teams/nokia_research_africa Google.is.very.active.in.the.area,.with. cated.in.Nairobi..This.new.space.offers. Nokia.Research.Center.based.in.Nairobi. the.aim.of.making.the.Internet.relevant. an.incubation.platform.to.help.young. focuses.on.understanding.the.unique. and.useful.to.Africans,.and.of.develop- entrepreneurs.to.concentrate.on.build- needs. of. African. mobile. phone. users,. ing.meaningful.products.for.Africa..The. ing.a.business.structure.around.their.in- in.order.to.create.concepts.and.visions. company.is.hosting.developer.and.tech. novations. to.fulfill.the.requirements..According.to. days.across.Africa,.and.G-Kenya.event. NRC,.key.in.its.focus.areas.is.user.expe- took. place. earlier. in. September. 2010.. rience.and.new.user.interfaces.for.joyful. The. conference. focused. on. Google’s. and.intuitive.mobile.interactions developer. and. business. technologies. (Chrome.Extensions,.App.Engine,.mo- bile,.Google.AdWords).36
  • 36. 9 Barriers to trade for foreign companiesKenya.has.made.large.efforts.in.order. ICT.equipment.and.promoting.the.ear- Further. measures. announced. by.to.create.a.friendly.environment.for.for- ly.roll-out.of.mobile.broadband..During. Kenyan.Government.for.the.Budget.for.eign.investments.. 2009,. Kenya. eliminated. both. import. years.2009/2010 In.2008.the.country.entered.in.the. duty.and.sales.taxes.on.mobile.phones. •. ISPs.will.be.allowed.to.offset.the.cost.World. Bank. Group’s.TOP. 10. reformers. and. other. ICT. equipment,. meanwhile. incurred.in.acquiring.the.right.to.use.for.“Easy.to.Doing.Business”.2008.rank.. CCK.demonstrated.an.established.and. the. optic. fiber. cable. over. a. period. In.addition,.Kenya.received.in.Feb- ongoing.programme.of.modernization. of.20.years.against.their.taxable.in-ruary. 2010. the.Industry’s.annual. Gov- of. the. telecoms. sector. (facilitated. the. come.ernment.Leadership.Award..The.Award. landing.of.fiber.optic.cables,.licensing. •. In. order. to. boost. infrastructure. in-recognized.the.leadership.role.played. new. spectrum,. and. launching. several. vestment,. wear. and. tear. increased.by.Kenya.in.extending.the.benefits.of. ICT/mobile.projects.aimed.at.promot- from.12,5%.to.20%.on.cost.of.tele-mobile.technology.to.more.consumers. ing.education.and.health.in.rural.com- communication.equipment.includ-by.cutting.tax.on.mobile.phones.and. munities). ing.the.fiber.optic.cable. •. A.5%.tax.reduction.on.the.purchase. of.computer.softwareFigure 12. Top 10 reformers in 2007. Source:.Safaricom.over.World.Bank.Group.figures Starting aDealing withEmployingRegistering Getting Protecting Paying Trading AcrosEnforcing Closing a Economy Business Licenses Workers Property Credit Investors Taxes Borders Contracts Business Egypt Croatia Ghana Kenya is Macedonia, FYR Working hard on becoming Georgia a Friendly and Safe place for Columbia Business Saudi Arabia Kenya China Bulgaria 37
  • 37. Business. opportunities. in. Kenya. In. summary,. investment. climate. •. Investor friendly arrangements:. The. may. come. at. different. level:. Network,. in.Kenya.is.interesting.for.ICT.business. Kenyan.government.guarantees.in- consumer,.and.B2B. thanks.to.several.“convergent”.factors: vestors.friendly.arrangement.. In.the.case.of.networks,.the.most. •. A “friendly” regulatory framework:.The. ¾. Export.Processing.Zones. effective.way.is.enter.into.a.direct.nego- CCK.provides.investors.with.a.one- (EPZ).programme:.attractive. tiation.with.the.operators,.even.though. stop.shop.for.registration,.licensing. incentives.to.export-oriented. the.sales.cycle.be.long..This.is.also.the. and.facilitation. investors. case. for. B2B,. which. is. a. business. cur- •. Skilled labour force: Kenya.has.English. ¾. Investment.Promotion.Center. rently.in.the.hand.of.the.operators. speaking. labour. force. with. skilled. (IPC):.to.promote.all.other. Interesting. opportunities. come. personnel. trained. in. ICT. and. relat- investment.in.Kenya. from.the.consumer.business..The.mar- ed.fields.. ¾. Tax.Remission.for.Export. ket.for.mobile.web.content.is.expect- •. Global information infrastructure rela- Office.(TREO):.programme.for. ed.to.evolve.rapidly,.and.there.will.be. tionships: Kenya.is.an.active.member. intermittent.imports.for.export. a.demand.for.technology.related.to.–. of.ITU.and.other.international.con- production.Double.taxation,. for.example.–.the.publishing.of.digit- ventions.and.standards bilateral.investment.trade. al.content.. •. Access to the regional market:. Ken- agreements.Liberalization.of.the. ya’s.membership.in.regional.trading. ICT.sector.. bodies. such. as. COMESA,. AU,. EAC. ¾. Reduced.taxes.on.computer. and. provides. potential. investors. hardware.and.software.Removal. with.a.large.potential.market. of.licensing.requirements.on. information.and.broadcasting. services38
  • 38. 10 BibliographyReports and publications Kenya ICT Board; www.ict.co.ke Nokia Siemens Networks;BuddeComm; www.budde.com.au Progress report 07–09/2009 www.nokiasiemensnetwork.com Kenya – Telecoms, Mobile, Broadband Omnitele; www.omnitele.fi & Forecasts report, 9th edition – 2010 Audit report on the quality of voice ICT related websites and blogs andBusiness Monitor International (BMI); service in Nairobi – February 2009 other sources: www.businessmonitor.com Opera Software; www.opera.com Balancing Act – Telecom, Internet, Kenya Telecommunications Report – State of the Mobile web report and Broadcast in Africa; Q4 2010 – June 2006 www.balancingact-africa.comCommunication Commission of Kenya Safaricom; www.safaricom.co.uk Business daily Africa; (CCK); www.cck.go.ke: Institutional investor road show www.businessdailyafrica.co Quarterly sector statistics report – 3rd presentation – November 2009 IT News Africa; www.itnewsafrica.com quarter – Jan–Mar 2009/2010 Sinovate; www.synovate.com Memeburn Insight and Analysis; Annual Report – 2008/2009 Synovates Kenya Internet Usage www.memeburn.com/about Frequency spectrum management Insights – Q2, 2010 Moses Kemibaro blog; and frequency licensing procedures – www.moseskemibaro.com 2009/2010 Corporate and association’s Reuters Africa; http;//af.reuters.com/Danida – Ministry of Foreign Affairs of websites Telcom Africa; Denmark: www.danida.dk Access Kenya Group; http;//telcomafrica.blogspot.com Business Opportunity Study within the www.accesskenya.com ICT Industry in Kenya, 2006 e-Government Kenya; InterviewsExport Processing Zones Authority; www.e ;government.go.ke Jessica Colaco; iHub Innovation Center, www.epzakenya.com Kenya Data Network; www.kdn.co.ke Director Kenya Information and Kenya ICT Board; www.ict.go.ke Mwendwa Mulaki; NSN, Head of Network Communication Technology Industry Orange Kenya; www.orange.co.ke Operations overviews – 2005 Safaricom; www.safaricom.co.ke Paula Linna; Aalto University, ResearcherFacebakers; www.facebakers.com Telkom Kenya; www.telkom.co.ke Markku Virtanen; Omnitele, Director Sales Facebook statistics Kenya Wananchi Group; www.wananchi.com and Business Development, Africa (www.facebakers.com/countries-with- Yu Essar Telecom Kenya; www.yu.co.ke facebook/KE – 2010 Zain Kenya (Barthi Airtel);Kenya Education Network Trust (KENET); www.ke.zain.com www.kenet.or.ke Telecommunications Service Providers Electronic/Mobile Government in Association of Kenya (TESPOK); Africa - February 2009 www.tespok.or.ke 39