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Is the Kenyan telecom industry run by a Monopoly?

21 May 2014, 14:44 Kisenya Jesse

Nairobi - Kenya has been independent for over 50 years now, and its citizens have continued to enjoy numerous benefits of improved quality of life in several areas that make life better and enjoyable and more rewarding.

The sheer ability to reach and to be reached and to connect with others socially and in business ranks high amongst the drives for development in Kenya and elsewhere in the world. It has been said in several forums, studies and analyses that telecommunications services are one of the key enablers of development, driving up the GDP of a nation.

Looking back at Kenya fifty years after independence, not all of the 43 million Kenyans can claim to enjoy telecommunications services in the country even with the advent of mobile communications to supplement the landlines over 14 years ago. And even those who have access to the services still register their dissatisfaction with the quality of the services offered by the operators.

The sector has also been fraught with several issues relating to the actual and perceived quality of the services offered by the operators ranging from network availability to lack of clarity of calls to dropped calls to lack of customer service and resolution of customer issues.

The Communications Commission of Kenya (CCK) reports a mobile penetration of 76.9%, with a total of 31.3 million mobile telephone subscribers in its latest report released in April 2014. Safaricom Limited recorded the largest share of 67.9 per cent; Airtel Networks Limited followed with 16.5 per cent, Essar Telecom (Yu Mobile) registered 8.5 per cent and Telkom Kenya (Orange) record 7.2 per cent.

A key component of the evolution of communications services remains the access to mobile banking services by holders of mobile accounts with the telecoms companies with the CCK report indicating a total of 26 million subscribers to the mobile money transfer service. Here again Safaricom leads with the lion’s share of the subscribers in excess of 95 per cent.

The market share data above clearly identifies one dominant operator, Safaricom, amongst the four operators in the telecommunications industry in Kenya.

One would beg to wonder why there is a skew to one operator, especially with the huge disparity in market shares between the number one and number two operator and also throw some light on the quality and service provision issues plaguing the sector.

One would go on to wonder if the issues of quality, national availability and service gaps are driven solely by industry dynamics or bay lack of strong competition or poor regulatory policies in the market, and if so then what needs to be done to improve the service these to the benefit of the population of Kenya.

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