BMI View: We hold our positive outlook for the Kenyan mobile market in our Q416 quarterly report update and have once again made some positive forecast revisions , based on the higher than anticipated growth in the first half of 2016. Strong mobile market growth will be supported by low penetration rates, currently around 82.9%. Airtel has made significant investments into developing 4G services in the country and the operat or is poised to launch its high- speed data service to rival the primacy of Safaricom this year. Airtel is set to release its 4G service before the end of 2016 and we are of the opinion that Orange will follow suit in 2017. Mobile financial services, in particular, will be a key driver for both subscription and revenue growth. However , we remain watchful of recent consolidation in the market, strong competition in the wireline sector, and Helios's acq uisition of a 70% stake in Telk om Kenya. Furthermore, we are still of the opinion that the completed digital migration will free up new spectrum, easing the response to growth in the data market.
|Strong Growth Prospects in the Market|
|e/f = BMI estimate/forecast. Source: National sources, BMI|
Latest Updates And Industry Developments
The Kenyan mobile market grew by 9.2% y-o-y by the end of H116, with total subscribers reaching over 39.4mn.
Airtel is set to launch its 4G LTE service in the country before the end of 2016 as it desperately seeks to compete with the growing primacy of Safaricom. Orange is expected to launch their high-speed data service in 2017.
The regulator is planning to issue 4G spectrum concessions in the 800MHz band to all three operators before the end of August 2016 for a fee of approximately USD25mn each. The regulator envisions equitable holdings of the 800MHz spectrum by all three major operators to ensure healthy competition in the market for high-speed data.
The regulator is considering a fresh round of mobile termination rate cuts, anticipated to take force next year when the present rates expire. It is likely that this will result in increased competition and could result in a price war.
The disconnection of Telkom Kenya's CDMA network led to a substantial fall in fixed-line subscriptions. We nevertheless forecast another 3.5% contraction in fixed-line telephone subscriptions in 2016.
The Kenya Telecommunications Report features BMI Research's independent industry forecasts on the future strength of Kenya's ICT market, covering the fixed-line, mobile and internet segments and analyses latest regulatory developments and corporate news, including investment activity, mergers and acquisitions, joint ventures and partnerships. Leading operators and manufacturers are fully profiled, highlighting their quarterly financial performance, capital expenditure plans and latest contracts.
BMI's Kenya Telecommunications Report provides industry professionals and researchers, operators, equipment suppliers and vendors, corporate and financial services analysts and regulatory bodies with independent forecasts and competitive intelligence on the telecoms industry in Kenya.
- Benchmark BMI's independent telecoms industry forecasts for Kenya to test other views - a key input for successful budgeting and strategic business planning in the Kenyan telecoms market.
- Target business opportunities and risks in Kenya's telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Kenya.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts and views, covering the ARPU, fixed-line, mobile (including 3G & 4G), internet and broadband markets.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the wireline and wireless sectors and within the broader political, economic and business environment.
BMI Industry Forecast Scenario
Historic data series (2010-2013) and forecasts to end-2019 for all key industry indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
- Fixed-line Telephony – Telephone lines (‘000); telephone lines/100 inhabitants.
- Cellular Telephony – Mobile phone subscribers (‘000); mobile phone subscribers/100 inhabitants; and where available, 3G & 4G subscribers (‘000); 3G & 4G subscribers/100 inhabitants; 3G & 4G subscribers as a percentage of overall mobile market.
- Internet Markets – Internet users (‘000); internet users/100 inhabitants; broadband internet subscribers (‘000); broadband internet subscribers/100 inhabitants.
BMI’s Telecommunications Risk Reward Index
BMI’s Risk Reward Indices provide investors (vendors, operators and suppliers) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an Indices of highest to lowest appeal to investors, with each position explained.
Market Data Analysis
Detailed market analysis of the mobile, mobile content, fixed-line and internet segments, broken down into:
- Market Data – Analysis of market size, operator shares, dominant trends, competitive landscape and key quarterly data.
- Technology/Service Rollout – Analysis of rollout/adoption of new technology, such as 3G & 4G, WiMAX, IPTV, pay-TV, LTE and valueadded handset services (gaming, music, video, apps etc.).
- Mobile Content – The latest trends in content and services available and being introduced by mobile operators, including a timeline of all the latest major mobile content developments.
Company Database – A comprehensive breakdown of KPIs of the leading mobile operators, including subscriber figures by type (pre-paid and post-paid); 3G & 4G subscriber figures; net additions; market share; ARPU; churn rates; minutes of use; voice and non-voice revenue; financial figures (including operating revenues, net profits and EBITDA).
Details of the regulatory bodies and their responsibilities, as well as a special focus on the rules surrounding competition and interconnection. Also covers the latest updates in the market’s development and regulatory rulings.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Telecommunications Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.