There are 3 MNOs operating in Kenya; market-leader Safaricom and Airtel Africa are highly active in competing for network coverage and quality. Safaricom has deployed around 1,000 new towers in the last 3 years, but Airtel has been aggressively expanding with around 1,000 new towers every year.
This has generated a lot of organic building for all local towercos. Safaricom however is starting to slow down its rollout as it’s capex budget is being stretched across towers, fibre and data centres as well as growing its mobile money platform.
State-owned Telkom Kenya however is facing competition challenges having declined in subscriber count since 2019 and has been in an ongoing payment dispute with its partner ATC Kenya, who is demand a payment of US$3.26mn to reconnect 896 towers that have been cut off due to a failure to pay lease rates.
Telkom Kenya also faces accruing debts that have almost doubled to US$46.2mn from May to October 2023. Despite a slowdown in 2023 due to economic headwinds, 2024 budgets are showing an update in new sites as MNOs play catch-up.
ATC Kenya delivers the bulk of site builds of Airtel Kenya, while smaller towercos AlanDick & Co and Atlas Towers rolling out sites for Safaricom. While macro towers make up most of Kenya’s towers, AlanDick has deployed around 150 DAS and small cells in Nairobi to enhance 5G coverage owing to the cities reliable grid and fibre network.
ATC Kenya are considering a last-mile Fibre-to-the-Tower service or partnership to make their site more attractive. Kenya’s energy grid is extensive, reliable and clean but is also expensive. Safaricom has been looking for an ESCO partner to help manage their energy capex and opex as well as meet ESG targets but is looking for an ESCO financing deal as the MNO wants to retain ownership of their power equipment.
Kenya is seeing a limited but sustained 5G rollout and is one of the leading 5G markets behind South Africa. Safaricom claims to have 500,000 5G users and is increasing 5G coverage, while Airtel reached 470 5G base stations by the end of 2023.
This has enabled Safaricom to achieve 5G coverage in all 39 counties through the deployment of 1,114 5G sites. However, just 15% of the population live in range of a 5G tower, and there is still huge demand for further 4G densification with 14.4% year-on-year growth in 4G devices.
Kenya’s telecommunication regulators are also mandating 90% geographical coverage for MNOs and driving demand for low-cost rural solutions with the Universal Service Funds providing support to fund capex for remote site deployments which small local towerco Seal Tower has been competing for. ATC Kenya has been exploring a network-as-a-service solution to support operators with cost-effective rural coverage.
