NAIROBI, Kenya – The Communications Authority of Kenya (CA) is proposing to increase the licensing fees for satellite communication service providers operating in the country.
This move will notably impact major players such as the American satellite internet firm Starlink, owned by Elon Musk, which has rapidly gained a foothold in Kenya’s internet market.
The new regulations, outlined in the Review of the Telecommunications Market Structure 2024, suggest that the initial Satellite Landing Rights (SLR) licence fee will rise from $12,500 (approximately Sh1.6 million) to Sh15 million.
Additionally, an annual operating fee of Ksh.4 million or 0.4% of a company’s annual gross turnover, whichever is higher, will be introduced.
As part of the proposed changes, the CA intends to merge the existing Submarine Cable Landing Rights (SCLR) licence with the SLR licence to create a new category called the Landing Rights Licence (LRL).
This new category will apply to companies setting up terrestrial cables transiting Kenya to neighboring countries, satellite hubs serving clients outside Kenya, and other satellite services such as telemetry, space research, and meteorological aids.
“This change aims to ensure technology neutrality and allow investors to land signals using any technology. Furthermore, this new licence category will expand its scope to accommodate investors,” the CA stated.
The LRL will have a 15-year term, and companies must pay a Ksh.5,000 application fee in addition to the initial and annual fees.
The proposals have sparked varied reactions among stakeholders in Kenya’s internet market.
Notably, Safaricom, the leading local internet service provider with a 36.7% market share, has raised concerns about the entry and operation of satellite internet providers.
In June 2024, Safaricom formally protested to the CA, urging a reconsideration of the independent licences granted to satellite service providers.
The company warned of potential illegal connections and harmful interference to mobile network operators, suggesting that satellite providers should operate in collaboration with existing local licensees.
“We propose that the CA consider mandating satellite service providers to operate in Kenya only through agreements with existing local licensees,” Safaricom stated. “Co-existence with mobile networks will not be possible without effective management and coordination, which is necessary to prevent interference.”
Starlink’s entry into the Kenyan market in July 2023 has intensified competition among internet service providers, offering competitively priced packages and superior speeds.
As of June 2024, Starlink had over 8,000 subscribers, positioning it as the tenth-largest ISP in the country.
However, the company temporarily suspended new subscriptions in several regions, including Nairobi and neighboring counties, due to network capacity overload.
Despite Safaricom’s objections, President William Ruto has welcomed the competition from Starlink, crediting it with prompting existing providers to enhance their services.
Safaricom CEO Peter Ndegwa, while acknowledging the challenges, has expressed openness to a potential partnership with Starlink, emphasizing the complementary nature of satellite and fibre technologies.
“Fibre is one of the best in the region, and satellite complements the rest of the technology,” Ndegwa told Bloomberg News. “We’re not worried about competition; we will address it.”
Other satellite service providers in Kenya include U.S.-based Vizocom and Viasat, Skynet by Telkom, and NTvsat from Germany.
The CA has opened the proposals for public scrutiny, inviting stakeholders to submit their comments by January 23.
The new regulations are expected to be implemented in the 2025/2026 financial year, setting the stage for a reshaped telecommunications landscape in Kenya.
