The Communications Authority of Kenya (CA) recently released a review of the Telecommunications Market Structure. The first market structure, released in 2008, was based on the Unified Licensing Framework (ULF). It was based on the principle of technology and service neutrality. The structure’s main aim was to simplify and facilitate market entry by minimising the regulatory requirements and processes for evolving and dynamic technologies.

The first amendment to the ULF market structure was made in 2012, where CA aimed at reducing the annual operating licensing fee to 0.4% of the annual turnover.  The second amendment, which came in 2014, sought to introduce new license categories, some of which include Electronic Certification Service Providers and Dot KE Domain Name Registrars, among others.  There were also Vehicle Tracking and Country Code Top-Level Domain registrar services under the Application Service Provider Licence category.  This latest review seeks to remove certain barriers to entry into the market with an aim to foster competition within the ICT sector.

Potential regulation of satellite services and systems

The CA’s proposal seeks to include satellite services under the Network Facilities Providers (NFP) licence, which would be categorised into several tiers. The NFP licence, as it stands, allows for the establishment of communications infrastructure using any technology to provide services in line with the Unified Licensing Framework. Currently, satellite systems are restricted because they are borderless, while the license offered by the CA is limited to the Kenyan jurisdiction, thereby contradicting the neutrality principle.

The proposed tiers would be categorised into Tier 2, 3 and 4. Under Tier 2, the license proposed would be limited to the geographical scope of the applicant seeking to set up satellite services within Kenya. From an impact point of view, the alignment in geography means that satellite services would be regulated under the same framework as terrestrial-based communications infrastructure. This could simplify the regulatory approach for satellite providers operating in multiple countries, potentially allowing them to expand services more easily across borders within the Kenyan jurisdiction.

Tier 3 allows the establishment of satellite hubs and the use of satellite systems infrastructure without the technology limitation provided that there is compliance with the prescribed fees. This tier is aimed at potential investors as the scope of coverage could be increased from one country to three. The same would be subject to conditions such as coverage limitation of a maximum of three countries. Additionally, licensees would incur a penalty of 0.2% of their annual gross turnover if they establish infrastructure in more than three countries without upgrading their licence from Tier 2 to Tier 3.  

Finally, Tier 4 offers licensing options for operations limited to one county. Applicants for this license will also be required to simultaneously apply for a county Application Service Provider License. Subject to application and approval from the CA, this license may be upgraded to Tier 3.  

Satellite landing rights

The current market structure has three types of licences that facilitate international connectivity, enabling the origination and termination of international traffic using technologies which contravene the principle of the Unified Licensing Framework.  The Satellite Landing Rights licenses require land rights to land their satellite signal in the country. There is a proposal to introduce a new licence category, the Landing Rights Licence (LRL). This merges the Satellite Landing Rights (SLR) and Submarine Cable Landing Rights (SCLR) licence categories. The LRL would allow holders to use any technology to land signals, including terrestrial cables, satellite hubs and satellite services beyond traditional communication lines such as telemetry.

Conclusion

The proposed revisions to Kenya’s Telecommunications Market Structure reflect a strategic effort to modernise the regulatory framework, promote competition, and enhance market access for emerging technologies, including satellite services. By introducing tiered licenses for satellite providers and merging landing rights licenses, the CA seeks to streamline market entry while ensuring compliance with evolving industry dynamics. However, challenges related to the borderless nature of satellite services and the alignment with the Unified Licensing Framework’s neutrality principle must be carefully addressed. Overall, these changes could stimulate growth in the ICT sector, foster innovation, and improve connectivity, provided they are implemented with attention to both regulatory consistency and market fairness.