Kenya’s Communications Authority (CA) has unveiled plans to dramatically increase licensing fees for satellite internet service providers (ISPs), potentially reshaping the country’s internet landscape.
The proposal includes raising the cost of a 15-year license from $12,302 to $115,331, a nearly tenfold increase, and introducing an annual levy of 0.4% of gross turnover.
The move comes as Starlink, a satellite ISP owned by SpaceX, rapidly expands its footprint in Kenya, driving fierce competition in the internet market.
The CA’s proposal is part of a broader effort to strengthen regulatory oversight of satellite ISPs.
According to the Authority, the changes aim to ensure “technology neutrality” by allowing providers to land signals using a variety of technologies.
The proposed regulations also expand the operational scope of satellite ISPs, enabling them to engage in activities such as terrestrial cable operations, telemetry systems, and even space research. This could allow companies like Starlink to establish ground stations in Kenya, a step that has faced delays due to previous regulatory hurdles.
“Licensees should be allowed to establish satellite systems, including hub facilities, and provide satellite services, provided they comply with the geographical scope principle (at least three counties in Kenya),” the CA stated in its proposal.
While the fee hike raises the bar for market entry, it could disproportionately affect smaller ISPs. Companies like Viasat, Indigo Telecom, and NTvsat, which collectively serve fewer than 1,000 subscribers, may struggle to absorb the increased costs. Critics warn that this could hinder the growth of these providers, limiting internet access in remote and underserved areas.
Local ISPs, however, may support the changes as they create tougher competition for satellite-based firms. The annual levy of 0.4% of gross turnover adds another layer of financial burden, potentially discouraging new entrants and affecting the profitability of existing players.
Since its launch in Kenya in June 2023, Starlink has grown exponentially, registering over 8,500 users by December 31, 2024—a staggering 1,000% growth rate.
The company’s low-cost, high-speed satellite internet services have disrupted the market, pushing local providers to respond aggressively. For instance, Safaricom, Kenya’s largest ISP with over 350,000 fixed internet subscribers, doubled its fibre internet speeds to compete with Starlink’s offerings.
Safaricom has also voiced opposition to satellite ISPs like Starlink. In July 2024, the telecom giant urged the CA to block satellite providers with operations in other countries, citing security risks and insufficient government oversight of their activities.
Safaricom argued that licensing such firms without requiring physical presence or partnerships with local entities could undermine accountability.
While Starlink has faced price hikes in other markets, such as Nigeria, the company has adopted a different strategy in Kenya. In September 2024, it introduced a cheaper hardware kit and a $30.87 monthly residential plan to attract more subscribers. These promotions have helped Starlink solidify its position in the Kenyan market, even as local ISPs enhance their offerings to retain customers.
The proposed fee hikes could significantly impact the accessibility and affordability of high-speed internet in Kenya, particularly in rural and underserved regions. While the CA’s regulations aim to encourage private-sector investment and innovation, the financial burden on smaller ISPs could slow the pace of expansion.
Meanwhile, larger players like Starlink and Safaricom are expected to continue battling for dominance, driving innovation but potentially widening the digital divide.
The CA’s proposal is subject to public consultation and feedback before final implementation. Stakeholders, including ISPs, consumer rights groups, and industry analysts, are expected to weigh in on the potential economic and social implications of the proposed changes.
