Price wars among Internet Service Providers (ISPs) are set to escalate as surging demand in Kenya’s Internet market reshapes consumer options.
The aggressive entry of commercial satellite Internet, led by tech billionaire Elon Musk’s Starlink, is forcing traditional providers to overhaul their pricing strategies to stay competitive.
In 2024, the sector was marked by fierce competition, with traditional providers vying to retain their diminishing market shares.
Analysts, however, suggest that Starlink’s entry could liberalise the market and empower consumers with greater choice.
“Allowing Starlink to operate would promote consumer rights,” noted commercial law advocate Cathy Mputhia in a recent Business Daily commentary.
“When you balance the concerns raised and the benefits to the consumer, I believe the consumer benefits far outweigh the concerns.”
Ms Mputhia emphasised that fair competition would compel ISPs to enhance service quality and lower prices. “Consumers will also gain the right to choose their preferred ISP, promoting digital rights and safeguarding freedoms of expression and media,” she added.
Rebecca Wanjiku, CEO of Fireside Engineering Group, predicts significant challenges for smaller ISPs serving localised communities.
“With the growth of fibre and other wireless technologies, many individuals have invested in small-scale telecommunications businesses.
However, the minimal support required for Starlink’s operations makes it unlikely they will partner with local companies,” she explained.
“These companies must innovate or risk obsolescence. Starlink’s expansion highlights the need for ISPs to prioritise quality and customer attention.”
Safaricom, Kenya’s leading ISP, filed a formal complaint against Starlink in August, urging the Communications Authority of Kenya (CA) to reassess independent ISP licensing policies. Safaricom argued that indiscriminate licensing could lead to illegal connections and interference with mobile networks.
However, this argument was overshadowed by President William Ruto’s endorsement of Starlink during a US visit in September, where he praised the company’s alignment with Kenya’s goal of expanding Internet access and fostering competition.
In December, Jamii Telecommunications Limited (JTL), the second-largest ISP in Kenya, petitioned the CA to investigate Starlink’s alleged predatory pricing practices, including deep discounts and below-cost pricing to attract customers.
JTL also engaged the Competition Authority of Kenya (CAK), asserting that such tactics could cripple local competitors and stifle market competition.
Despite these concerns, CAK dismissed the petition, citing Starlink’s limited market share of 0.5 percent.
“To investigate predatory pricing, the entity must hold dominance or market power in Kenya and engage in abusive practices,” the watchdog clarified. “Starlink, as a new entrant, lacks both dominance and market power, providing no basis for an investigation at this time.”
