Kenya’s telecommunications market is one of the most dynamic in sub-Saharan Africa and, with the successful mobile money applications and the deployment of LTE (long-term evolution) in 2013, the East African country is a critical regional market for investors, operators and vendors, according to a new report from Pyramid Research (PR).
In its country intelligence report titled ‘Kenya: Operators prepare for LTE while mobile data drives 3G expansion,’ PR said Wednesday that although the Kenyan telecom market appeared to remain stagnant throughout the forecast period in US dollar terms, ”it will actually grow steadily in local currency terms as operators jostle for market share.”
The market generated KSh146bn (US$1.7bn) in local currency in 2012 and it is expected to follow an upward trend at a CAGR (compound annual growth rate) of 6 percent in local currency to KSh194bn (US$1.7bn) in 2017.
“Competitive tariffs and a battle of promotions continue to drive growth, while Safaricom defends its leadership and Orange and Airtel try to make a bigger push for increased market share through its new 3G networks and mobile money services,” the report explained.
Safaricom, Airtel and Orange are leading providers of mobile telecommunication services in Kenya.
According to PR, mobile voice continued to hold the biggest market share in 2012, dominating 63 percent of the market with revenue of US$1.1 billion.
Price wars have been a recent trademark of the Kenyan mobile voice segment, and the report noted that it may happen yet again following further interconnection rate cuts in late 2012.
“This will push the operators to prioritise their mobile data services, which we project to see the biggest growth between 2012-2017 at a CAGR in local currency of 11 percent and constituting a 39 percent share of the entire telecom market revenue by 2017.
“The biggest decline will come from dial-up Internet revenue … which will be largely phased out by 2017,” the report added.
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