The Communications Authority of Kenya (CA) has proposed new regulations that would require satellite communication service providers, including Starlink, to pay up to 0.4 percent of their gross annual turnover or a minimum of Sh4 million annually, plus a one-time license fee of Sh15 million.
This represents a significant increase from the current fee of $12,500, with the new licensing structure combining satellite landing rights (SLR) with landing rights license (LRL) to expand service offerings including terrestrial cables, satellite hubs, and space research capabilities.
The regulatory changes come as Starlink's entry into Kenya's market in July 2023 has dramatically impacted the internet landscape, with satellite internet subscribers increasing by 1,301 percent to 8,324 users by June 2023.
While Starlink's presence has led to improved internet speeds and competitive pricing across the sector, it has also faced opposition from established players like Safaricom, which has urged the CA to require foreign providers to partner with local operators.
With Starlink revolutionizing internet access and catalyzing exponential growth in satellite connectivity, the move highlights Kenya’s ambition to regulate a burgeoning market while addressing competitive disparities.
Yet, it also raises critical questions about whether such regulatory costs could deter global innovators or hinder accessibility for underserved regions.
In an age where connectivity defines competitiveness, how can African regulators strike the delicate balance between fostering innovation and protecting local industry without compromising affordability and inclusion?
Meanwhile, the Communications Authority of Kenya (CA) has proposed a new Telecommunication Equipment Distributor (TED) license requiring electronics wholesalers and telcos to pay a Sh250,000 one-off fee for 15 years plus annual operating fees of 0.4% of turnover (minimum Sh120,000) to combat counterfeit devices.
For major players like Safaricom, with Sh10.54 billion in device sales last year, this could mean annual fees of Sh42 million.
The initiative aims to stem the influx of counterfeit electronics, estimated to cost Kenya Sh3.2 billion annually in tax evasion, with over 3.5 million fake mobile phones reported.
The regulation requires vendors to source from licensed importers and provide one-year warranties. This marks CA's third attempt to control counterfeits, following the Supreme Court's 2023 approval for a Device Management System and an earlier IMEI verification project that ended in March 2023.
The Kenyan market's nuanced realities—such as a price-sensitive population, fragmented distribution networks, and entrenched informal trade practices—raise critical questions about implementation and compliance.
While the initiative could bolster trust in device authenticity and improve tax collection, it risks stifling smaller distributors, potentially reducing market competitiveness.
Lessons from prior failed initiatives, like IMEI verification, reveal that technological enforcement must align with market dynamics and robust stakeholder engagement.