Kenya has paved its path to development in numerous areas via a long-term development plan called Vision 2030. This plan aims to catapult the country to a middle-income economy. To succeed, three key pillars have been outlined. These are economic, social, and political development and will focus on the following:
- Achieve an average economic growth of 10% per annum
- Create fair and equitable social development in a clean and secure environment
- Realize a democratic system which focuses on people's issues and is accountable and result-oriented
Growth areas within the Kenyan ICT sector
Growth is expected in internet access, M-commerce and infrastructure development. These are some of the features of these sectors:
- Sector value and growth – Kenya’s ICT sector is valued at USD 500 million and is expected to grow to US$ 1 billion by 2017
- Current accessibility – The current internet penetration rate is 52.3% with mobile penetration at 70.6%
- Key ongoing infrastructure developments – A USD 2.89 billion strategy was launched in 2013 to extend internet access while a 4G network is also underway in collaboration with the government and local telecom operators
Mobile penetration in Kenya was 70.6% in the year 2013. The regulator, Communication Authority of Kenya, plans to achieve 90% penetration by 2018. The Kenyan mobile telecom market is expected to grow at an annual rate of 5% till 2018.
Safaricom has a market share of 68% among the mobile operators mainly due to its M-pass m-commerce service. There is stiff competition in the market leading to possible exits of a few operators. Due to the exit of Yu, Safaricom and Airtel will split up their business for infrastructure and subscribers respectively.
World leader in mobile money
68% of Kenya’s adult population uses mobile money which is the highest in the world. They also account for around 30% of the world’s 61 million active mobile money users.
Safaricom’s M-peas has 18.2 million subscribers averaging daily transactions estimated at USD 23 million.
Over 99% of internet users in Kenya access the world wide web via smartphones and other hand-held devices. Due to the relatively low penetration rate of around 52%, there is great potential for growth. Internet access is expected to grow at a compound rate of 48.3% until 2018 and the government’s strategy will lay down fiber-optic cable across the country to reach 80% of all districts by 2017.
Growth in internet penetration and mobile data has led to various opportunities in mobile and m-commerce as well as infrastructure and other investments. Specific opportunities are listed below:
Mobile and e-commerce
- Demand for cheaper 3G enabled handsets
- Demand for solutions such as cloud computing
- Ramp up of IT investments in financial services, retail, and aviation sectors
- Growing demand for mobile-enabled high-definition video, gaming services and the internet based television
Infrastructure and other investments
- Rural markets will be the next challenge as growth in urban markets fall Internet security targeting larger business clusters is even more important with the rapid expansion of the IT sector
- Demand for inexpensive PCs and hardware
- Oil, gas, and financial services will drive demand for advanced corporate IT solutions
Though opportunities in the Kenyan ICT sector are many, for a smoother market entry, it would be helpful to obtain in-depth market research to facilitate the process.