Policies for Prosperity -Telecommunications Network Infrastructure in Kenya

PRESENTATIONJanuary 2009

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Introduction

• The Telecommunication sector has undergone major milestones in the last couple of decades. Due to technology convergence, nations consider telecommunications technology to be part of the Information and communication technology (ICT) which is the driver of economies in the 21st century.

• The availability of a robust telecommunications network allows for a rapid and free flow of information, which increases overall economic efficiency by ensuring that decisions made by economic actors take into account all available relevant information.

• The Government of Kenya has recognized the importance of ICT in economic development and has initiated major steps to promote its use.

• Kenya ICT policy was approved and gazetted in march 2006. The policy was based on Kenya’s Economic Recovery Strategy for Wealth and Employment Creation.

• The vision of the ICT policy is “a prosperous ICT-driven Kenyan society”. Its mission is “to improve the livelihoods of Kenyans by ensuring the availability of accessible, efficient, reliable and affordable ICT services”.

• Among the challenges that the policy seeks to address is the ICT infrastructure and policy, legal and regulatory framework.

• Provision of modern telecommunications infrastructure and information networks is recognized as key to rapid economic and social development of the country.

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• The policy states that “the overall Government objective for the sector is to optimize its contribution to the development of the Kenyan economy as a whole by ensuring the availability of efficient, reliable and affordable telecommunication services throughout the country.”

• From the ICT policy, two broad sub-sector policies will be analyzed namely the telecommunication sub-sector policy and the Information Technology sub-sector policy.

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• Reforms in the ICT sector have facilitated licensing of additional service providers making the services relatively more available, accessible and affordable.

• The ICT telecommunication sub-sector has recorded a high growth rate over the years supported by heavy investment according to 2008 economic survey report.

• The performance of the sub-sector was further boosted by the introduction of the wireless technology by Telkom Kenya and local loop operators for providing telephone services. Growth in subscriber base and exchange capacity for fixed, wireless and mobile network led to an improved total tele-accessibility that stood at 35.0 in 2007 compared to 9.9 in 2006.

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Table 1: Telecommunication Statistics

YearYear 19991999 20002000 20012001 20022002 20032003 20042004 20052005 20062006 20072007

Fixed line capacity

404,990 420,370 446,302 490,000 508,000 508236 517,131 518,423 503,903

Fixed Teledensity

1.018 1.024 1.042 1.042 1.021 0.86 0.86 0.86 0.90

Number of wire line subscribers

292,131 309,379 321,482 328,116 328,158 279,884 286,729 293,364 264,882

Subscribers in urban areas

278,280 294,600 303,996 309,878 309,070 265,598 271,925 279,079 243,875

Subscribers in rural areas

13,426 14,779 17,486 18,238 19,288 14,446 14,803 14,285 26,668

Number of Payphones

8,184 8,684 9,135 9,264 9,964 9,273 8,273 7,913 5,805

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Source CCK database

Table 2: Mobile Telephony Subscription

YearYear 20032003 20042004 20052005 20062006 20072007 March March

20082008

Number of

subscribers

1,590,785 2,546,157 5,263,676 7,340,317 11,440,077 11,986,007

Mobile

penetration (%)

4.95 7.77 15.74 21.62 33.65 35.25

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Source CCK database

Year 2004 2005 2006 2007

Number of BTS 626 1,144 1,606 1,924

Population coverage 52% 62% 65% 77%

Land coverage 11% 13% 19% 27%

Table 3: Mobile coverage

Source: CCK database, Safaricom and Celtel coverage maps

• Review of Telecommunication Infrastructure covers fixed telephone and wireless telecommunication, mobile telecommunication, and data communications services.

• Review of Telecommunication and Internet Services covers availability, accessibility, affordability, and quality of services. knowledge and skills uptake has also been reviewed.

• Further, the chapter reviews planned information and communication infrastructure projects including :– The East African Marine Systems (Teams) – National Terrestrial Fibre Optic Network Project– Government Common Core Network (GCCN) – Data Centre/Data Recovery Centre

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• Kenya has been benchmarked with other countries that have a similar history in terms of competitiveness and network readiness. The countries compared with are Ghana, Egypt, South Africa, Uganda, Mauritius, Malaysia, and Singapore. The ICT strategies and policies in these countries are reviewed and lessons drawn for Kenya to adopt.

• Globally, countries have effectively leverage ICT in pursuit of prosperity. According to the Global competitive index (GCI) 2008, Kenya ranked 93rd, overall improvement of six places from the previous year.

• The paper identifies weaknesses in Kenya ICT Strategies and proposes alternatives .

• The chapter concludes with recommended strategies and policy direction for Kenya to consider in order to effectively leverage ICT in pursuit of a prosperous nation.

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Table 4: International Gateway Bandwidth

Year 2005 2006 2007International gateway downlink bandwidth (Mbps) 89.89 100.96 337.18

International gateway uplink bandwidth (Mbps) 70.28 73.47 147.14

Total International gateway bandwidth (Mbps) 160.17 174.43 485.14

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Source: CCK Database

Table 5: Internet Subscribers

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07Number of licensed ISPs 66 72 76 78 51 51Users by ITU (estimates) 200,000 400,000 1,000,000 1,054,920 1,111,000 2,770,296

Internet subscribers per 100 inhabitants 0.65

1.29

3.17

3.28

3.39

8.29

Dial-up Internet subscribers 10,076

9,608

10,490

12,482

12,308

Number of clients subscribers from all the ISPs

16,136

20,307

30,803

35,748

179,384

Source: Telkom Kenya, Internet Market Study Analysis

Table 6: Global Competitive and Networked Readiness Indexes

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Kenya Uganda South Africa Mauritius Ghana Egypt Malaysia Singapore

The Networked Readiness Index 2007–2008 rankingsRank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score

92 3.34

109 3.06 51 4.05 53 3.96 - - 63 3.74 26 4.82 5 5.49

The Global Competitiveness Report 2008–2009Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score

93 3.84 128 3.35 45 4.41 57 4.25 102 3.62 81 3.98 21 5.04 5 5.53

E-government rankingRank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score

122 0.3474 133 0.3133 61 0.5115 63 0.5086 138 0.2997 79 0.4767 34 0.6063 23 0.7009

Source: The Networked Readiness Index 2007–2008 report, The Global Information Technology Report 2007-2008 and the United Nations e-Government Survey 2008

Table 7: Social- Economic and Tele-density Statistics

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Kenya Uganda SA (2004) Mauritius Ghana Egypt Malaysia Singapore

Population (000,000)

38 31 48’832 1’271 23’946 76 27 4

GDP (U$) (2007)(000)

26'950'500 10'160'

47(2006

)

257'172'82

1

(2006)

7'520'126 7'624'1

6

(2006)

131'095 186'720 132'152'92

6 (2006)

Fixed telephone lines per 100 inhabitants. (2007)

0.71 0.53 9.56 28.63 1.60 14.87 16.37 41.97

Mobile cellular subscribers per 100 inhabitants. (2007)

30.23 13.58 87.08 73.60 32.39 39.82 87.86 133.54

Computers per 100 inhabitants. (2005)

1.44 1.67

(2006)

8.36 17.52 0.58 4.87

(2007)

23.41

(2006)

76.87

2007)

Internet users per

100 inhabitants.

(2007)

7.99 2.51

(2006)

8.16 26.95 3.75 13.95 55.67 68.00

Table 7: Social-Economic and Tele-density Statistics

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Kenya Uganda SA (2004) Mauritius Ghana Egypt Malaysia Singapore

Broadband Internet

subscribers per 100

inhabitants. (2007)

0.05 0.01 0.78 4.87 0.07 0.63 3.80 20.18

% population covered

by mobile signal

(2007)

77.00 80.00 99.79 99.00 68.00 93.50 92.50 100.00

Source: ITU 2008 Database