NAIROBI, Kenya — Kenya’s digital economy is being stifled by outdated spectrum rules, weak enforcement against dominant operators, and regulatory gaps in fast-growing digital platforms, according to a new competition assessment by the World Bank and the Competition Authority of Kenya (CAK).
The report attributes Kenya’s persistent high data costs and limited consumer choice to structural shortcomings in the telecommunications sector—particularly spectrum allocation, infrastructure sharing, and the regulation of operators with significant market power (SMP).
“Kenya has one of the continent’s most dynamic digital markets, but regulation has not kept pace with the scale and influence of dominant players,” the report states.
It notes that spectrum frequencies remain allocated through administrative processes rather than competitive auctions, creating inefficiencies and discouraging new entrants.
The report warns that limited infrastructure-sharing rules—especially for masts, fibre, and last-mile connectivity—push up operational costs and limit expansion by smaller operators. This, in turn, reduces options for consumers and maintains the dominance of larger mobile network operators.
Digital markets present additional challenges. The study cites concerns around tying and bundling practices, self-preferencing by platforms, and potentially exploitative data practices. These issues, it argues, require specialised legal tools beyond conventional competition law.
To address these gaps, the report urges Parliament to fast-track the Competition (Amendment) Bill, 2025, which introduces new obligations for dominant digital platforms, regulates data-driven market power, and empowers CAK to intervene earlier in cases of unfair conduct.
Coordination is also a central concern. The authors call for a joint regulatory framework between CAK, the Communications Authority, the Central Bank of Kenya, and the Office of the Data Protection Commissioner to avoid regulatory blind spots.
With Kenya positioning itself as a regional technology hub, the report warns that failure to strengthen digital competition could limit innovation and deter investment.
“If we do not modernise the regulatory pillars now, Kenya risks entrenching digital monopolies that can dictate prices, access, and innovation for years,” the report concludes.
