By Winnie Kamau
Nairobi, Kenya: Kenya’s Communications Authority (CA) has proposed an 800% increase in satellite ISP licensing fees under the Review of the Telecommunications Market Structure. The CA is currently reviewing the proposals, many Kenyans and investors are waiting to see if they will be ratified.
CA has put forth a proposal that would drastically raise the cost of licensing for satellite Internet providers (ISPs). Under the new proposal, the fee for a 15-year license would increase by almost tenfold, jumping from the current price of $12,500 to a hefty $115,331. This substantial increase in cost could have significant implications for the satellite internet market in Kenya, potentially affecting the affordability and accessibility of satellite internet services for consumers and businesses alike.
The surging demand for high-speed internet in Kenya, especially in underserved and rural areas, led to over 16,000 Starlink subscriptions. These changes are crucial for Kenya’s digital landscape, where satellite ISPs play a vital role.
Just a REMINDER to submit your comments and proposals on the review of the telecommunications market structure. the closing date for this exercise is 23rd January 2025. The consultation document is available here https://t.co/gfQpbe9loT @TESPOK_KENYA @MoICTKenya https://t.co/fVKg4smU04 pic.twitter.com/6FTpWcbidi
— Communications Authority of Kenya (CA) (@CA_Kenya) January 14, 2025
Smaller Internet Service Providers (ISPs), like Viasat and NTvsat, which collectively serve less than 1,000 users, may find it challenging to absorb the additional financial burden imposed by these fees. This could potentially lead to a slowdown in the rollout of broadband connectivity, particularly in remote and underserved regions where these smaller ISPs play a crucial role.
According to the Communications Authority, the current market structure provides for Submarine Cable Landing Rights (SCLR), Satellite Landing Rights (SLR), and International Gateway Systems and Services (IGSS) Licence categories.
These three Licence categories are able to facilitate international connectivity enabling the origination and termination of international traffic using specific technologies, which contravene the principles of ULF Framework.
IGSS licensees manage international traffic via satellite technology, whereas SCLR licensees acquire rights for landing submarine cable systems that come ashore from the sea. SLR licensees, on the other hand, obtain rights to land their satellite signals within the country.
“The three licenses currently have different regulatory fees. While SCLR and IGSS have an initial license fee of Kshs. 15 million, SLR has a one-time fee of $12,500. The annual operating fees also vary. SCLR has a minimum annual fee of Kshs. 4 million, and IGSS has a minimum annual fee of Kshs. 800,000. The SLRA license has no annual operating fee, only the one-time fee of US$12,500 which covers a 15-year term” CA states.
CA describes the significant differences in initial Licence fees, annual operating fees, and deployed technologies among these Licence categories that are inconsistent with the technology-neutrality principle of the ULF Framework.
CA proposes the existing SCLR Licence be modified to exclude international gateway provisions and the existing IGSS Licence be modified to make it technologically neutral, and to permit a Licence holder to utilize any form of technology to handle the international traffic.
“Therefore, billing and switching of international traffic will be a preserve of this Licence category; there will be no change in the fees charged for the IGSS Licence. The SLR and SCLR Licence categories were merged to create a new Licence category called the Landing Rights Licence. This change aims to ensure technology neutrality and allow investors to land signals using any technology. Furthermore, this new Licence category will expand its scope to accommodate investors looking to leverage on Kenya’s unique location” says CA.
The new structure will consider three types of infrastructure: terrestrial cables that only pass through Kenya on their way to neighboring countries; satellite hubs that exclusively serve clients outside Kenya; and satellite services beyond traditional communication, such as telemetry, tracking and control subsystems, space research, and meteorological aids.
The proposed fees, while intended to support the expansion of broadband infrastructure, carry the unintended risk of hindering the very progress they aim to achieve.
CA noted that Holders of Landing Rights Licences shall only commercialize the capacity within Kenya through licensed IGSS licensees or provide end-user/direct- to- device (D2D) services through duly licensed ASPs. The proposed regulatory fees and Licence terms for the IGSS Licence will remain unchanged, except for the proposal to make them technology-neutral.
Kenya’s vision of a digitally inclusive nation depends heavily on expanding broadband infrastructure. Enabling satellite ISPs to operate more effectively will accelerate progress toward digital goals, enhancing citizens’ quality of life and stimulating economic growth and innovation. However, it remains to be seen if the hike in broadband infrastructure will help achieve this.
