University of Nairobi School of Computing

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University of NairobiSchool of Computing
Informatics

• ICT Sector Performance Review 2009/10
• Prof. Timothy M. Waema
• Research ICT Africa Kenya Team Leader
• 16 November, 2010

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Agenda

1. Research ICT Africa (RIA) and ICT research
2. Access and usage demand survey (2007)
3. ICT sector performance review 2009/10
   (supply-side)
4. Regulatory environment perception survey
5. Research challenges
6. Challenges policy recommendations

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1. RIA and ICT research

• RIA Network is one of the research networks
  originally started with funds from IDRC
• Network has grown from 2004 and now consists of
  18 African countries
• Purpose of RIA research is
• to create a rich evidence base of the ICT sector
  developments in selected African countries to
  enable comparison of policy outcomes in different
  countries against national strategies and sector
  performance ? influence ICT policy
• Kenya team consists of
• 1. Prof. Timothy M. Waema 4. Prof. Meoli
  Kashorda
• 2. Ms Margaret Nyambura 5. Dr. Monica
  Kerrets-
• 3. Dr. Catherine Adeya Makau

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2. Access and usage demand survey
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Methodology

• Use of NASSEP IV sampling frame KNBS
• Sample 1461 HHs
• Major urban 584 (40)
• Other urban 439 (30)
• Rural - 438 (30)
• HH selection
• Uniform sample of 24 HHs in each cluster
• 1st HH randomly selected in each cluster
• Next HH systematically determined (last HH
  interval)
• Provision for replacements for vacant, demolished
  or households whose occupants were not available
  after a maximum of three call-backs
• Respondents selection
• Head of HH or next most senior member of HH
• Data collection using PDA analysis by SPSS

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Key findings
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HHs with computer Internet

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E-mail presence

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Reasons for not using Internet

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Internet tariffs 20 hrs/month

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Monthly Internet expenditure

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3. ICT sector performance review 2009/10
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Methodology

• Review of documents, e.g. CCK publications
• Review of websites of operators, CCK, etc.
• Telephone interviews with selected persons

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Key findings
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Summary of telephony services

• Fixed telephone services
• Connections been declining since end of monopoly
• Slight growth in 2009 due revitalisation of
  Telkom Kenya following its privatization in 2007
• Phenomenal growth of mobile services eaten into
  this market
• Fixed wireless telephone services
• Not been growing much
• Expected to grow with migration to the Unified
  Licensing Framework

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• Mobile telephone services
• Phenomenal growth (51.2 penetration by June
  2010)
• Growth can be attributed to
• the competitive effects resulting from the
  increased number of mobile operators
• increased mobile coverage
• aggressive marketing through increased offers and
  promotions, esp. availability of low denomination
  calling cards
• increased affordability of handsets
• Increased infrastructure sharing among the mobile
  phone operators
• Safaricom shares towers with Zain and Orange
  through reciprocal arrangements
• Essar Telecom Kenya (Yu) also shares Zains
  towers and base stations

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(No Transcript)
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Interconnection rates fixed to mobile phones
(USD) (2009/10)?

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Mobile termination rates in US cents (Sep 2010)

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Internet users

• Have been growing slowly, with phenomenal growth
  2009/2010
• 2.90m June 2008
• 3.65m June 2009 (9.5 penetration)
• 7.83m June 2010 (20 penetration)
• Growth in 2009/2010 largely due to
• entry of mobile operators
• aggressive rollout of data services by mobile
  operators, esp. Safaricom
• increased access to social networking sites
  through mobile phones that has become popular
  among the youth in the country
• Internet penetration figures of other countries
• 33.4 Mo 28.9 Nig 20 Ke
• 10.8 SA 9.6 Ug 5.3 Gh
• 4.1 Rw 1.6 Tz 0.5 Et

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Commercial broadband bandwidth cost (Feb 2010)
Guaranteed bandwidth (Kbps) CCK Avg Sep 2009 Op 1 Feb 2010 New as of old tariff Op 2 Feb 2010 New as of old tariff
256 38,625 12,500 32.4 12,000 31.1
512 72,276 23,000 31.8 24,000 33.2
1024 282,102 lt3,500 48,000 600 17.0 48,000 600 17.0
Note Retail prices have been slow in coming
down!!
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4. Regulatory environment perception survey
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Background

• What?
• A perception survey of the Telecom Regulatory
  Environment (TRE) in Kenya from 57 industry
  experts from 3 balanced sectors
• Operators, consultants, CSO/public
  sector/researchers
• When?
• Jul-Aug 2009 (before i/connection determination
  2)
• Why?
• Gather perceptions of the telecom regulatory and
  policy environment in the country
• Gauge the strengths and weaknesses of the
  environment
• Use the results to influence changes in the ICT
  policy and regulatory environment in Kenya
• Benchmark with other African countries
• Results ca be used as a tool for investors to
  assess regulatory risk in a country

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Data collection

• Assessment of three sectors
• Fixed services, Mobile services, ISP/VAS services
• For each of the 3 sectors, assessment of 7
  dimensions
• Market entry
• Allocation of scarce resources
• Interconnection
• Regulation of anti-competitive practices
• Universal service obligation
• Tariff regulation
• Quality of Service
• For each dimension, rating the quality of the
  regulatory environment on a scale
• 1 highly ineffective to 5 highly effective

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Key findings
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Mobile services
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VANS/ISP services
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Regulation of interconnection
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Regulation of anti-competitive practices
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Quality of services
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Average satisfaction rate
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5. Research challenges

• Difficult to obtain some of the data, esp.
  Financial data - investment and revenue
• Most sector-oriented data not available
• Limited information in operators websites
• Some dont publish the tariffs on the web
• Email contacts dont work - except customer
  service email whose directed queries were rarely
  answered
• Offers and promotions that made it challenging to
  establish the actual tariffs
• CCK information often differed from the operator
  data
• While respondents promised to respond to the
  online regulatory review, most did not

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6. Challenges policy recommendations
Challenge Policy recommendation Timing
National ICT policy not in tune with current realities Update the existing ICT policy through stakeholder participation June 2011
Regulations not supported by key stakeholders Review regulations with support of key stakeholders March 2011
High retail cost of broadband Institute a regulatory mechanism(s) to bring down retail broadband tariffs March 2011
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Challenge Policy recommendation Timing
ICT is not real sectors, e.g. cannot obtain aggregated socio-economic data on ICT employment, GDP contrib., products, etc.) MoIC and KNBS to engage in a process that will create a single ICT/ITES sector and mainstream it into the national planning and operational frameworks (e.g. KNBS can collect data on ICT/ITES as a sector like all sectors) Dec 2011
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Challenge Policy recommendation Timing
No institution has explicit mandate over ICT sector data Give legal mandate over ICT data to one of the existing institutions June 2011
ICT sector data is not accurate up-to-date Body to regularly collect and provide accurate data on ICT sector, collaborating with KNBS Conti-nuous
Independence and power of the regulator Strengthen CCK to be a more independent powerful converged regulator ?