Kenya - Information, Communications and Technology (ICT)Kenya - Telecommunications Equipment
Unit US millions
Total Market Size
Total Local Production*
Imports from the U.S.
Exchange Rate: 1 USD
NB: All figures in millions of USD with exception of exchange rate in Kenya shillings (Kshs) Applicable HS Codes: 8517, 8525, 8527, 8528, and 8529 (Telecommunications equipment)*Data not available
Total Market Size = (Total Local Production + Total Imports) – (Total Exports).
Total Market Size: Global Trade Atlas
Total Local Production: N/A
Total Exports: N/A
Total Imports: Global Trade Atlas
Imports from U.S: Global Trade Atlas
Exchange Rate: Central Bank of Kenya
Information Communication Technology (ICT) has been an important aspect of East Africa’s economic growth over the last 15 years. In the year 2000, East Africa (Kenya, Uganda and Tanzania) had approximately 250,000 internet users, and by the end of 2014 the region had more than 29 million. Kenya is at the forefront of technological innovations and is often referred to as the ‘Silicon Savannah’.
According to the World Bank, Kenya’s ICT sector’s growth has outperformed every other sector, expanding by 23 percent annually during the last decade. The sector is now six times larger than it was at the beginning of the decade. This remarkable growth can be attributed in part to innovations, such as the introduction of revolutionary mobile money revolutions such Mpesa (Swahili word meaning money).
The country is a regional leader in terms of internet connectivity, value-added services, most notably mobile money transfer service, and mobile banking services. The country’s ICT sector is set to contribute up to 8 per cent of the country’s GDP through IT-enabled services (ITES) and create 250,000 jobs by 2020. Internet access has continued to spur economic growth and led to the government’s launch of the Digital Economy Blueprint, a framework to improve Kenya’s and Africa’s ability to leapfrog economic growth. The document is hinged on five pillars: Digital Government; Digital Business; Infrastructure; Innovation-Driven Entrepreneurship and Digital Skills and Values.
The Ministry of Information, Communications and Technology (ICT) has the core responsibility for formulating, administering, managing and developing the Information, Broadcasting and Communication policy. In May, 2016, through an Executive Order, the Ministry was split into two state Departments; the State Department of Broadcasting and Telecommunications, and the State Department of ICT and Innovation.
To enhance the development of broadband, the Ministry of ICT in 2013, launched the National Broadband Strategy (NBS) aimed at transforming Kenya into a knowledge-based economy through the provision of quality broadband services to all citizens in the country By implementing NBS 2023, the government aims at increasing access to broadband coverage of 3G to 94% of the population by 2020; and increase digital literacy in schools to 85%, expand broadband to the 47 counties and especially to have 50% digital literacy amongst the workforce.
All the 47 counties now have ICT Roadmaps. These roadmaps are aligned with the National ICT Master plan and the local County development plans(CDPs). Through the roadmaps, counties can provide the best, most cost-effective ICT-enabled services and resources to its citizens. They have also helped county governments to make ICT investments that are consistent with global best practice and with the idea of shared ICT services with the central government and neighboring county ICT infrastructure.
The government of Kenya has also established what are known as Huduma Centers (a swahili word meaning service) in all the counties to ensure all Kenyans can access efficient Government services at their convenience. This is attained mainly through five channels of service delivery: a One stop shop citizen service centers to provide National Government Services from one single location e.g. IDs, Passports, NHIF, NSSF, Birth Certificates, Business Name Registration; An online portal to provide integrated services offered by various national government ministries, departments and agencies; Huduma Mobile Platforms to offer m-government services to citizens from convenience of their mobile phones; Huduma Payment Gateway and Huduma Payment Card a unified and integrated multi-channel payment gateway to facilitate ease of payment for government services through debit cards, m-pesa, paypal etc; and a Huduma Call Center to provide customer service using a single dialing prefix that citizens can use to enquire about services offered by different government agencies.
According to the Communications Authority of Kenya (CA) , the sector’s regulator, availability of various technologies and services that offer faster and more reliable internet connections has continued to grow in the country with consumers embracing these services. This has led to increased usage of internet/data services over the years. According to the CA, the number of internet users was reported at 33 million as of December 2017, which is nearly seventy percent of the total population.
A continued push by the Kenya Government to provide more of its services online has contributed to demand-driven growth of the sector. Some of the major government services that were automated include online applications for acquiring a Personal Identification Number (PIN) for tax purposes and the introduction of iTax, a platform where citizens are now able to file their annual tax returns online.
Kenya’s GSM network has been impressive since the inception of mobile telephone services 25 years go. There are currently four main providers, Safaricom leading with a 71.2% subscriptions market share, followed by Airtel at 17.6%, Telkom Kenya at 7.4% and finally the new entrant Finserve Africa Limited (Equitel), which has a market share of 3.8% according to the Communications Authority of Kenya. Current mobile phone penetration is 88 percent.
There are also four Undersea Fiber cables that land off the coast of Kenya. SEACOM, TEAMS, EASSY, LION2, and Satellite Internet Bandwidth are live and providing services.
The total number of fixed telephone subscriptions has continued to record a downward trend. During the second quarter in 2016, the total number of fixed network subscriptions was recorded at 72,801 subscriptions, down from the previous quarter’s 80,288 subscriptions. This decline in fixed telephone lines is attributed to availability of GSM cell phones, CDMA (termed as fixed wireless), and vandalism to physical infrastructure for scrap metal.
According to the Digital Economy Blueprint, mobile technologies and services generated 7.1% of GDP or US$110 billion in Sub-Saharan Africa in 2017. According to the Kenya National Economic Survey report of 2019 the value of the ICT sector expanded by 12.9% from Ksh. 345.6 billion in 2017 to sh 390.2 billion in 2018, driven by growth in the digital economy.
The CA estimates the Broadcasting Sector as having over 100 FM radio stations and around 40 digital Digital Terrestrial Television (DTT) sites to date, which will increase to more than 80 by mid2018. Kenya is a leader in the conversion to DTT in Africa and has licensed two signal distributors KBC – Signet and Pan African Group (PANG) – which have been contracted by the Government to cover more than 68% of the population by mid-2016. Kenya’s TV household penetration rate of was estimated at 32% in 2014. Free-to-air broadcasting is still the primary access method in over 85% of TV households, with Pay-TV services in main cities accounting for approximately 561,500 of the country’s 12 million households. DTT has an overall 56% market share of total Pay-TV users, followed by DTH with 36%, and then the cable system of Zuku (Wanachi).
In January 2016 the government passed new regulations that support local content. The regulations include a mandatory inclusion of 40 percent (9.6 hours) of local content. Advertisers will also be required to ensure that at least 40 percent of commercials contain local scenes and are produced by a local crew.
The Communications Authority of Kenya (CA) is currently implementing a new system to regulate the frequency spectrum across the country. The system promises to be a critical regulatory tool that will facilitate efficient planning and utilization of spectrum resource in view of increasing demands between fixed, mobile services, and broadcasting. The Communications Act, 1998, also mandates the Communications Authority of Kenya (CA) to develop a national cyber security management framework through the establishment of a national Computer Incident Response Team (CIRT) to manage all cybercrime cases.
The Sector at a Glance:
Source: CA Annual Report(2017)
Sub-Sector Best Prospects
Smart DevicesCellular telephony remains the fastest growing telecommunication sub-sector. The ongoing clamp down on counterfeit phones will continue to create demand for original manufacturer verified mobile handsets. The use of smart devices such as tables and smart phones continues to grow. U.S. mobile devices are available and competing for the middle to upper income brackets with brands like [CI1] Apple now being used widely in the market. The lower- to middle-end of the market is however price sensitive, resulting in wide use of cheap and often counterfeit mobile devices that are easily available and often sold as original devices to unsuspecting customers. In a move to fight the growing counterfeit problem in the sector, the Kenyan government switched off all counterfeit phones from the GSM network. ADSL equipment will continue to have a market as homeowners and apartment owners continue to install Internet services in existing buildings to build their attractiveness to potential tenants. Smart phones and smart devices are also expected to have significant sales as the largest internet population consists of teenagers and young adults who have adapted to accessing the Internet on hand held devices.
Mobile MoneyMobile Money continues to be a huge market in Kenya. More and more public sector and state agencies have integrated mobile money platforms with their banking applications. The figure below shows the use of mobile money payment in the public sector.
Fig 1: Proportion of Institutions with Mobile Payment Account
Source: Public Sector ICT Report (2016)
Fixed Data and Mobile DataGrowth in Kenya’s fixed and mobile data segments sector is strong and will continue to grow demand for telecommunication technologies, especially 3G/4G or mobile data enabled devices that support Machine to machine solutions. Best sales prospects include data terminals, modems, routers, broadband equipment, IPPABX, and VSAT equipment. Fiber cable and connectivity accessories will also be in demand as the fiber backbone spreads throughout the country as companies expand the roll out of home connectivity.
Online ServicesMore and more small and medium size (SME’s) businesses are entering the online space via creative company websites. A recent report from the Communications Authority of Kenya puts the number of total registered domain names at 62,215 with “. co.ke” (companies) holding the highest share of 92.83 percent. The adoption of e-commerce has driven revenues for most businesses with some only holding virtual offices as they conduct their trade through online and mobile platforms. The disruptive use of social media in marketing has driven the uptake of data services, both fixed and mobile.
Business Process OutsourcingKenya has several key factors going for it that makes for a viable BPO destination. Key strengths include price competitiveness, quality infrastructure, and availability of a young and educated workforce. The BPO sector currently employs an estimated 3,000 youths, as there are about five globally competitive BPO service providers in Nairobi which translates to an additional $20 million into the country’s revenue. The first call center was licensed in 2004 and by 2007 the number had increased to 18. The government has floated a public-private partnership to develop an ICT city with a 5,000 BPO seat park projected to cost US$ 1 billion. Private investors are also building smaller parks in several parts of the country. Other policies, such as the government’s Vision 2030 which places ICT as one of the key development pillars, also encourages growth and market deepening. In addition, the government has actively expanded electricity connections to urban and rural areas, providing a platform for private sector investment in IT.
Mobile Innovations and ApplicationsIn addition to mobile money, services that rely on 4-digit SMS short codes and GSM USSD (simple, menu-driven interfaces that allow users to work through multiple options along a decision tree on basic mobile phones) are now ubiquitous in Kenya. These mobile interfaces, combined with open source technology platforms such as RapidSMS and Ushahidi that facilitate bulk information distribution and crowdsourcing, provide simple and effective tools for innovation across a variety of products and services. Other USSD products are in Agribusiness , Healthcare, Public Information Sharing, to connect users e.g farmers to traders, mothers to community workers etc.
OpportunitiesICT has been a critical enabler in the achievement of Kenya’s Vision 2030 and will play a central role in supporting the country’s “Big Four “agenda and other sectors. We see opportunities for U.S. firms in various sectors such as:
Education sector: Education Broadband Connectivity project, a holistic, multi-faceted and national approach to Internet connectivity for the nation’s schools (focusing on secondary for reasons described in Section 5.3) and tertiary college institutions below university level is recommended. This is envisaged to include: the identification or creation of Internet ready (“e-ready”) schools and institutions in each county. In particular, a focus will be secondary schools that are already teaching the Kenya Certificate of Education (KCSE) Computer Studies curriculum and offering students for examination; the provision of necessary ICT training to the teachers in participating institutions to ensure that they are well prepared to make use of connectivity; provision of broadband connection and support to the “Education Cloud” portal – the Learning Management System - that is to be established by the Kenya Institute of Curriculum Development (KICD). This will facilitate ready access to digital content developed by KICD as well as to other approved local or international education content and resources; and technical support to ensure that the connected schools are not hindered by technical problems from the full benefit of broadband connectivity. Both hardware and Software components will be needed to support this ambitious project.
Healthcare sector: Health IT continues to gain momentum as the government of Kenya rolls out it’s eHealth strategy. The government of Kenya has a well-defined eHealth strategy with a specific e-Health policy tool, the Kenyan e-Health strategy 2011-2017. The document identifies five main areas of focus and implementation: Telemedicine; Health Information Systems; Information for Citizens; mHealth, and eLearning.
Cybersecurity: Online crime also referred to as cyber security is an offence committed through the Internet using computer systems, hardware and networks such as hacking, phishing, identity theft and cyber bullying. The National KE-CIRT/CC provides cybersecurity tips and offer advice about common security issues for non-technical computer users. Organized crime has been quick to take advantage of the opportunities offered by the Internet, particularly the growth in e-commerce and online banking. Online criminal groups target individuals, government institution networks to steal personal information in bulk to profit from the compromised data available to them. The banking sector has been adversely affected and this saw the Central Bank of Kenya release a new directive for all banks to share updated cybersecurity policies. Growing cybersecurity concerns will see software and hardware components become critical for large multinationals, banking and financial service providers, as well as government agencies. Software demand will continue to increase with a focus on data protection and data loss prevention.
Key Government Institutions in the ICT Sector:
- Communications Authority of Kenya (CA) is a regulatory body for the Communications sector responsible for regulating Telecommunications, Postal and Radio Communication Services.
- Information Communication Technology Authority (ICTA) is responsible for developing and positioning Kenya as the preferred ICT destination in Africa, promote competitive ICT industries, develop world class ICT institutions and increase access and utilization of ICT
- Konza Technopolis Development Authority (KoTDA) is responsible for coordination of the planning and development of the SMART city.
- Kenya Broadcasting Corporation (KBC) is responsible for public broadcasting services to inform, educate and entertain the public through radio and television.
- Kenya Films Classification Board (KFCB) is responsible for regulating exhibitions of film content by examining and classifying films for public exhibition.
- Kenya Film Commission (KFC) is responsible for developing and marketing Kenya as a filming destination.
- National Communications Secretariat (NCS) is responsible for advising the government on info-communications policies.
- Postal Corporation of Kenya (PCK) is responsible for provision of communications, distribution and postal services.
- National KE-CIRT/CC is responsible for coordinating responses to cyber security matters at the national level in collaboration with relevant actors locally and internationally
- Kenya Music Copyright Society is responsible for supporting the Musical fraternity within Kenya through enhancing their earning for their works.
- Media Council of Kenya is responsible for regulating media, conducts and disciplines journalists.
- Communications Appeal Tribunal (CAT) under the MoICT is responsible for arbitration of disputes between parties in the Communications sector.
U.S. Commercial Service, U.S. Embassy Nairobi
U.S. Department of Commerce | International Trade Administration
Tel: +254 (20) 363-6725; Janet.Mwangi@trade.gov
Web ResourcesBusiness Monitor international
Communications Authority of Kenya (CAK)
Kenya National Bureau of Statistics Economic Survey
Ministry of Information Communications Technology
Telecommunications Service Providers of Kenya
Ministry of ICT
ICT Authority (ICTA)