Kenya’s Communications Authority (CA) has proposed a sharp increase in licensing fees for satellite internet service providers (ISPs), raising concerns about its potential impact on market competition and accessibility. The proposed changes, detailed in the Review of the Telecommunications Market Structure 2024, suggest raising the cost of a 15-year license from KES 1.6 million to KES 15 million, alongside an annual levy of 0.4% of gross turnover or KES 4 million, whichever is higher.
Stakeholders have until January 23, 2025, to provide feedback on these proposals, which are set to be implemented in the 2025/2026 financial year.
Impact on Satellite Internet Providers
The tenfold increase in licensing fees poses a significant challenge for satellite ISPs in Kenya, especially smaller players like Viasat, Indigo Telecom, and NTvsat, who collectively serve fewer than 1,000 subscribers. While the CA argues the changes promote technology neutrality and attract investment, critics warn this move could stifle competition, limiting consumer choice and access to affordable internet.
Under the new framework, the Landing Rights License (LRL) will replace current Submarine Cable Landing Rights (SCLR) and Satellite Landing Rights (SLR) licenses. This shift aligns with Kenya’s Unified Licensing Framework (ULF), enabling satellite providers to operate terrestrial cables, tracking systems, and engage in space research.
The CA emphasizes that this approach will allow providers to “land signals using any technology,” potentially encouraging global players like Starlink to deepen their investments in Kenya.
Starlink’s Rapid Growth and Local ISP Response
Since its launch in 2023, Starlink has disrupted Kenya’s internet market, offering affordable, high-speed connectivity. By December 2024, the company had registered over 8,500 users, growing by over 1,000% in just 18 months. This rapid expansion has pressured local ISPs like Safaricom to enhance their offerings.
However, Safaricom has voiced concerns over regulatory compliance, arguing that satellite ISPs should operate through local partnerships to ensure accountability and safeguard national security. Safaricom CEO Peter Ndegwa has called for satellite services to complement, rather than compete with, existing urban technologies.
While Starlink’s scale may allow it to absorb higher licensing fees, smaller ISPs could struggle, risking reduced competition and slower internet expansion in underserved regions.
Regulating Unauthorized ISPs and Expanding Coverage
The CA also aims to address the rise of unlicensed ISPs deploying networks on unauthorized frequency bands. To ensure compliance, providers operating under the NFP-T3 category must now cover at least three counties. Non-compliance will result in penalties of 0.2% of annual turnover per county operated without proper licensing.
Balancing Growth and Regulation
Kenya’s National ICT Policy Guidelines, 2020, and the CA’s 2023-2027 Strategic Plan emphasize competition, infrastructure sharing, and digital inclusion. However, the proposed fee hike could create barriers for new entrants, potentially slowing efforts to connect underserved regions.
Public consultations on the proposals are ongoing, with implementation expected in FY2025/2026. The outcome of these changes will shape the future of satellite internet in Kenya, influencing competition, investment, and connectivity.
