Kenya's telecommunications sector is poised for a transformative phase as the Communications Authority (CA) proposes significant changes to the regula
Kenya’s telecommunications sector is poised for a transformative phase as the Communications Authority (CA) proposes significant changes to the regulatory and operational landscape for satellite Internet service providers.
The new framework introduces both challenges and opportunities that could reshape market dynamics and influence the broader goal of digital inclusion. The CA plans to increase the 15-year licensing fee for satellite Internet providers from $12,302 to $115,331. An additional 0.4% levy on gross turnover will be implemented. Smaller providers like Viasat and NTvsat, which collectively serve under 1,000 subscribers, may struggle with these increased operational costs. This could lead to higher service prices or reduced coverage in underserved areas, where demand for connectivity is rising.
Providers will be allowed to explore terrestrial cable operations, telemetry services, and space research activities. Companies like Starlink can establish ground stations, improving service quality and capacity, particularly in rural and underserved regions.
Security and accountability challenge
Since launching in June 2023, Starlink has grown to over 8,500 users, demonstrating the demand for reliable satellite Internet in areas lacking traditional infrastructure. Starlink’s rapid growth positions it as a dominant player, benefiting from the expanded operational permissions.
Established providers like Safaricom have raised concerns about satellite providers operating independently, citing security and accountability issues. Safaricom has suggested mandatory partnerships between satellite operators and local mobile providers.
The CA must navigate these concerns while fostering competition and technological advancement. Satellite Internet providers are critical for bridging digital divides, particularly in remote areas. Regulatory changes must ensure these services remain accessible and affordable for underserved populations.
The increased costs could drive smaller players out of the market, consolidating power among larger providers like Starlink. This may reduce competition but could also lead to improved service quality through economies of scale.
By allowing providers to venture into new areas like space research, the CA is opening doors for innovation and potential synergies with global initiatives in satellite and space technologies. The balance between regulatory revenue generation and fostering a supportive business environment will determine the long-term viability of the sector.
Strategic considerations include CA considering a phased approach to fee increases, allowing smaller providers time to adjust and maintain service delivery. Encouraging collaborations between satellite and local telecom operators could address security concerns while leveraging existing infrastructure. To promote digital inclusion, the government could provide incentives for satellite providers focusing on underserved areas.