Communications Authority of Kenya (CA) has proposed a sharp increase in the 15-year licensing fees for satellite Internet providers (ISPs), raising them from the current Thus, the licensing fees would increase from approximately KSh1.78 million to KSh 16.22 million.
Additionally, the new regulations introduce an annual levy of 0.4% on gross turnover, significantly raising the operational costs for companies like Starlink.
These changes come at a critical time for Kenya’s digital development, where demand for high-speed Internet is rapidly growing, particularly in underserved rural areas.
Satellite ISPs have been vital in connecting these regions, but the proposed fee hike could jeopardize progress.
In December, the CA unveiled new proposals to revise the Satellite Landing Rights (SLR) licence required for satellite companies to operate within the country.
These changes aim to streamline the process for companies to establish a local presence.
The SLR licence grants companies the rights to transmit their satellite signals within Kenya.
The proposed adjustments are detailed in the Review of the Telecommunications Market Structure 2024, which is currently open for public review.
Stakeholders have until January 23 to provide feedback on the proposed regulations, which the CA intends to enforce in the 2025/2026 financial year.
Smaller providers who collectively serve fewer than 1,000 users, may struggle to sustain operations under the increased financial burden, potentially slowing the expansion of connectivity in remote areas.
According to the CA, the review aims to eliminate “certain market entry and operational barriers identified over time.”
The regulator states that the proposal aims to ensure fairness and regulate the growing satellite ISP market.
“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,” noted the country’s telecom regulator.
However, critics warn that the higher fees could stifle competition and innovation, potentially pricing small and medium-sized ISPs out of the market.
This, in turn, could limit Internet access for underserved communities, further entrenching the digital divide.
Amid these challenges, the proposal does include forward-looking measures.
It allows satellite ISPs to diversify into terrestrial cable operations, telemetry, and space research.
Such expanded opportunities could attract investment into Kenya’s tech sector, enabling companies like Starlink to establish ground stations and improve service delivery.
Starlink, owned by Elon Musk’s SpaceX, has experienced rapid growth in Kenya since its launch in June 2023.
Offering affordable, high-speed satellite Internet, the service has gained over 8,500 users in just over a year.
It has been instrumental in addressing digital gaps, particularly in areas beyond the reach of traditional telecom infrastructure.
Meanwhile, local players like Safaricom, which serves more than 350,000 fixed Internet users through its fibre network, view satellite ISPs as both competitors and disruptors.
Safaricom has previously urged the CA to require partnerships between satellite providers and local mobile operators, citing concerns about security risks and a lack of local accountability if companies like Starlink operate independently.
Kenya’s regulatory approach highlights the delicate balance between fostering innovation and maintaining market oversight.
While stricter rules may protect local providers and ensure compliance, they could also hinder competition and slow the rollout of high-speed Internet to regions in need.
As the CA moves toward finalizing these regulations, stakeholders must weigh the need for accessibility against the sustainability of ISP operations.
Striking this balance will be essential to ensuring that Kenya’s digital transformation benefits its entire population.
