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Kenya Information and Communication Technology (ICT) industry has seen a major turnaround in the past few years. This is driven largely by an explosive growth in mobile phone technology, with new innovations such as the world’s first mobile money transfer service, M-Pesa.
After nearly 13 years of liberalisation, the ICT sector posted record levels of growth, increasing its contribution to the Kenyan economy. The industry’s growth can be attributed to sustained investment by both the public and private sector, and Kenya now has access to an exceptional range of industry specific investment options, telecommunications infrastructure, as well as a vibrant and open print and broadcast media industry.
Kenya has also moved to strengthen its offering in value – added IT services, with the robust business process outsourcing and software development fields doubling their contribution to the sector over the past year.
Kenya’s new Constitution, alongside continued investments in infrastructure and a rapidly growing data segment, provide a stable base on which ICT can continue to lean on, as it moves to become one of the biggest contributors to the Kenyan economy.
Continued focus on creating Africa’s most enabling and competitive ICT environments has driven the Ministry of Information and Commtmications to develop policies that will lead to the development of a robust and vibrant sector.
The country anticipates a 25 per cent growth in Gross Domestic Product (GDP) in the next five years from the ICT sector, an increase from the current five per cent.
Kenya ICT Industry overview
Mobile phone subscriptions Kenya’s greatest success story in the telecoms industry to date is the remarkable growth of mobile telephony, with 28.08 million mobile subscriptions as at December 31, 2011, up from 20,119,000 as at June 30, 2010. This growth resulted in an increase in mobile penetration rate from 52.2 per cent as at June 30, 2010, to 71.3 per cent as at end 2011, Way above the African penetration rates estimated by International Telecommunications Union (ITU) at 41.0 per cent.
Mobile phone service providers in kenya lowered both on-net and off-net tariffs in a bid to attract and retain customers in their respective networks.
Safaricom has the market stranglehold with18.69 million mobile phone subscribers, Airtel Kenya 4.27 million. Telkom Orange 2.89 million while Essar Telecom’s YU brand had 2.23 million.
Increase in mobile subscriptions is an indication of a flowering market and operators’ determination to continue growing their subscriber base through tactful marketing approaches.
Kenya has been recording declining fixed lines, fixed terrestrial lines and fixed wireless subscriptions. In 2011, fixed-line subscriptions dropped from 460 thousand recorded as at June 30, 2010, to 283,546 at the end of 2011.
This reduction could be attributed to increased use of mobile services.
The fixed international voice traffic for both outgoing and incoming calls dropped too by 22.4 and 1.9 per cent, respectively, as at June 30, 2011, mainly because of increased use of mobile phones following the lowering of international voice calling charges and other competing alternatives, such as instant messaging over the Internet.
Total local mobile traffic declined to 6.70 billion minutes from 7.09 billion minutes recorded in September, representing a decrease of 5.58 per cent.
By the end of 2011, the minutes of use (MoU) per subscriber per month was 79.9. The number of SMSes per subscriber per month stood at 10.71 in December.
The mobile phone operators are shifting their focus to the data business to boost their revenues.
Currently, Safaricom-the market leader, is the only operator making profit while the rest – Airtel Kenya, Telkom Kenya’s Orange, and Essar’s yu are still in the red.