Kenya’s internet landscape is witnessing significant growth, driven by increased infrastructure deployment from established players and new entrants like Starlink and Airtel 5G. This expansion is indicative of a burgeoning Internet Service Provider (ISP) sector. The number of ISPs available to consumers has risen, reflecting this growth.
A remarkable development is the surge in smartphone usage. As of Q3 2023-2024, Kenya’s smartphone count has reached 34,500,712, marking a 17% increase from the previous year’s 29,487,846. This increase has led to smartphones outnumbering feature phones for the first time, according to the Communication Authority of Kenya (CA).
The rise in fixed data and broadband subscribers further underscores the market’s expansion. Subscriber numbers jumped from 1,112,288 in 2023 to 1,397,848 in 2024, representing a 25.67% growth rate. This trend highlights the increasing demand for internet services and signals potential opportunities for new ISPs.
What Is an Internet Service Provider (ISP)? An ISP is an organization that provides internet connectivity to individuals and businesses. ISPs manage the necessary infrastructure to establish a point of presence on the internet within specific geographic areas.
Types of ISPs:
- Tier 1 ISPs: These are the backbone providers, managing extensive infrastructure like undersea cables. They offer traffic to other ISPs and do not serve end users directly.
- Tier 2 ISPs: These providers have private peering relationships with content providers and purchase transit from Tier 1 ISPs. Bayobab, for example, operates a vast fiber network across Africa and offers extensive connectivity solutions.
- Tier 3 ISPs: Focused on delivering internet access to end-users, these ISPs rely on Tier 1 and Tier 2 providers for broader internet connectivity. They serve residential and small business customers.
Licenses and Permits: In Kenya, the Communication Authority (CA) regulates the ISP sector. To operate as an ISP, you need an Applications Service Providers (ASP) license, which includes various fees such as an Initial Operating License Fee and Annual Spectrum Fee. A Network Facilities Provider (NFP) license may also be necessary for Tier 2 ISPs intending to build their own networks.
Internet Infrastructure and Security Needs: Deploying infrastructure requires significant capital and expertise. Companies like Bayobab Kenya offer resources to help new ISPs, including extensive fiber networks and security services. Bayobab Kenya also provides redundancy options to mitigate outages and ensure optimal connectivity.
Internet Packages and Pricing: ISP pricing in Kenya varies. For instance, popular packages include a 10 Mbps plan priced between KES 3,000 and KES 3,500. New entrants like VGG Connects and Poa Internet offer competitive rates, with pricing for home Wi-Fi ranging from KES 1,500 to KES 15,000. Starlink offers a unique KES 1,300 package capped at 50 GB.
Recommended Internet Speeds: The average download speed in Kenya is 13.69 Mbps, with top ISPs like Starlink providing speeds ranging from 50 to 250 Mbps. Choosing a reliable Tier 2 ISP can help maintain speeds above the national average and ensure high-quality service.
Fair Usage Policy: To manage network performance, ISPs often implement a Fair Use Policy (FUP), which caps data usage to prevent excessive consumption by a few users. FUPs typically range from 500 GB to 1 TB per month and help maintain service quality.
Customer Support and ISP Downtime: Good customer support and minimal downtime are crucial for ISPs. Bayobab Kenya offers 24/7 support and redundancy options to handle outages and ensure continuous service.
In summary, Kenya’s expanding internet sector presents numerous opportunities for new ISPs. By understanding the market dynamics, obtaining the necessary licenses, and leveraging existing infrastructure, entrepreneurs can successfully enter and thrive in this growing industry.
