Kenya’s Communications Authority (CA) has unveiled a controversial proposal to significantly increase licensing fees for satellite internet service providers (ISPs), a move that could reshape the country’s internet landscape.
The proposal includes raising the cost of a 15-year license from $12,302 to $115,331, marking a nearly tenfold increase, along with an annual levy of 0.4% of gross turnover for service providers.
This proposed change comes at a time of growing competition in the Kenyan internet market, particularly with the rapid expansion of Starlink, a satellite ISP owned by SpaceX. Since its launch in June 2023, Starlink has already registered over 8,500 users by December 2024, reflecting an impressive 1,000% growth rate. The company’s low-cost, high-speed satellite internet services have had a significant impact, forcing local providers to respond with competitive offerings.
The CA’s proposal is part of a broader regulatory effort aimed at strengthening oversight of satellite ISPs. The authority has emphasized that the changes are intended to promote “technology neutrality,” allowing providers to land signals using various technologies. Additionally, the new regulations could expand the operational scope of satellite ISPs, permitting activities such as terrestrial cable operations, telemetry systems, and even space research. This may open the door for companies like Starlink to establish ground stations in Kenya—an effort that has faced regulatory hurdles in the past.
In addition to the licensing fee hike, the CA’s proposal suggests that licensees be allowed to set up satellite systems, including hub facilities, and provide services across a geographical scope that covers at least three counties. This would enhance the operational flexibility of satellite ISPs, further intensifying the competition with local internet providers.
However, critics warn that the proposed fee increases and levies could disproportionately affect smaller ISPs, such as Viasat, Indigo Telecom, and NTvsat, which collectively serve fewer than 1,000 subscribers. These companies may struggle to absorb the increased costs, potentially hindering their growth and limiting internet access in rural and underserved areas. In contrast, larger players like Starlink, which already have significant resources, could weather these financial burdens more easily.
Local ISPs, such as Safaricom, Kenya’s largest provider with over 350,000 fixed internet subscribers, may support the changes, as they could level the playing field and intensify competition with satellite-based firms. Safaricom has already responded aggressively to Starlink’s market disruption by doubling its fibre internet speeds and introducing new promotional plans to attract more customers.
Yet, Safaricom has also expressed concerns about satellite ISPs, particularly those like Starlink, which operate in multiple countries. In July 2024, the telecom giant urged the CA to block satellite providers from operating without a physical presence or local partnerships, citing security risks and insufficient oversight. This position reflects broader concerns about accountability and regulation in an increasingly competitive and complex internet landscape.
Starlink, for its part, has adopted a different strategy in Kenya compared to other markets. In September 2024, the company introduced a more affordable hardware kit and a $30.87 monthly residential plan, making its services even more accessible to Kenyan consumers. This approach has helped the company solidify its position in the market, even as local ISPs like Safaricom enhance their offerings to compete.
The proposed licensing fee hikes are now open to public consultation, and the CA will review feedback before making a final decision. The changes, if implemented, could significantly affect the accessibility and affordability of high-speed internet in Kenya, particularly in remote and underserved regions. While the CA aims to encourage innovation and investment in the sector, critics fear that the financial burden on smaller ISPs could slow progress and exacerbate the digital divide in the country.
The next few months will be crucial as stakeholders—ranging from ISPs to consumer rights groups—voice their concerns about the economic and social implications of the proposed changes, which may ultimately determine the future of Kenya’s internet landscape.
