Kenya’s Communications Authority (CA) has put forward a proposal to substantially increase the 15-year licensing fees for satellite Internet providers (ISPs) from the current $12,302 to $115,331. In addition to this significant hike, the new regulations also introduce an annual levy of 0.4% of the gross turnover, further escalating the operational costs for providers such as Starlink.
These regulatory changes are pivotal for Kenya’s digital landscape, especially as the demand for high-speed Internet continues to surge, particularly in underserved and rural areas where satellite ISPs play a crucial role. However, the proposed fee structure poses a risk to this progress. Smaller ISPs, such as Viasat and NTvsat, which together serve fewer than 1,000 users, may find it challenging to absorb these increased financial burdens. This could potentially slow down the rollout of much-needed connectivity in remote regions.
While the CA’s proposal aims to ensure fairness and regulate the expanding satellite ISP market, the higher fees could inadvertently stifle competition and innovation. Small and medium-sized ISPs, which are essential for expanding Internet access in remote areas, might be priced out of the market. This could leave underserved communities with fewer options, thereby perpetuating the digital divide.
Despite these challenges, the proposal does include some progressive elements. For instance, it allows satellite ISPs to engage in terrestrial cable operations, telemetry, and even space research. This expanded scope could attract more investment into Kenya’s tech ecosystem, enabling companies like Starlink to establish ground stations and enhance service quality.
Starlink, owned by Elon Musk’s SpaceX, has rapidly established itself in Kenya’s market since its launch in June 2023. By offering affordable and high-speed satellite Internet, Starlink has grown its subscriber base to over 8,500 users in just over a year. The service has been instrumental in bridging digital gaps, providing connectivity in areas beyond the reach of traditional telecom infrastructure.
However, local players like Safaricom, which has over 350,000 fixed Internet users through its fibre network, view satellite ISPs as both competitors and potential disruptors. Safaricom had previously urged the CA to mandate partnerships between satellite providers and local mobile operators, arguing that independent operations by companies like Starlink pose security risks and weaken local accountability.
Kenya’s regulatory approach underscores the tension between fostering innovation and maintaining market oversight. Stricter rules could protect local players and ensure compliance, but they also risk stifling competition and slowing the spread of high-speed Internet to regions that need it most.
As the CA finalizes these changes, it is crucial for stakeholders to consider policies that promote both accessibility and sustainable business operations for ISPs. Striking this balance will be key to ensuring that Kenya’s digital transformation benefits its entire population.
