A quick glance at the internet scene in Kenya shows that the sector is growing. Established players are deploying more infrastructure as new entrants notably, Starlink and Airtel 5G come in. This shows that the Internet Service Provider (ISP) sector is growing. The growing number of ISPs to chose from is one key indicator.
Even more eye raising is the growth in consumer numbers. After Q3 of 2023-2024, the number of smartphones stands at 34,500,712 a huge leap of 17% from the 29,487,846 in Q3 of 2022-2023. Based on statistics from the Communication Authority of Kenya (CA), during this period, the number of smartphones surpassed the number of feature phones for the first time in Kenya.
The growing market is further elaborated by the growing number of fixed data and broadband subscribers. Subscribers rose from 1,112,288 in 2023 to 1,397,848 in 2024 representing a 25.67% growth rate. Based on the growth rate, entrepreneurial individuals would want to know what is needed to be an ISP in Kenya.
READ: How Kenyans connect to the Internet from Submarine Cable Infrastructure, ISPs to Personal Devices
What Is an Internet Service Provider (ISP)
In simple definition, an Internet Service Provider (ISP) is an organization that provides individuals and businesses with internet connectivity. ISPs operate the infrastructure required to establish a point of presence on the internet within a specific geographic area.
The Different Types of ISPs
ISPs function as the backbone of the internet, transporting data between networks and end-users. They are categorized into a tiered system based on the scale and scope of their services.
Tier 1 Internet providers are the networks that are the backbone of the Internet. They are sometimes referred to as backbone Internet providers. These ISPs build and manage infrastructure like undersea cables. They provide traffic to all other ISPs, not end users. Tier 1 ISPs own and manage their operating infrastructure, including the routers and other intermediate devices (e.g., switches) that make up the Internet backbone.
Tier 2 Internet Service Providers
Tier 2 ISPs also own and manage their operating infrastructure, and some have also invested heavily in the undersea cables. Tier 2 ISPs are internet service providers that have private peering relationship with content providers, other Tier 2 networks and also purchase transit from Tier 1 providers to deliver internet services to their customers who are largely other Telcos and Tier 3 ISPs. They primarily serve regional and national markets.
Bayobab is a prime example of a Tier 2 ISP. Bayobab has a fibre network of 16 substantial subsea fibre cables that wind their way ashore at landing stations connecting to key national points. Tier 1 ISPs can deliver the best network throughput over the Internet backbone through these private peering connections because they own their network infrastructure and have direct control over how traffic flows through these connections.
For instance, Bayobab operates a vast terrestrial network spanning 114,000 kilometers across Africa, connecting 47 international locations. This extensive fiber infrastructure, the continent’s largest, is expanding to 135,000 kilometers by 2025. ISPs can request for a call back by sending an email with their details to [email protected].
Tier 3 ISPs
Tier 3 ISPs are primarily focused on delivering internet access to end-users within specific geographic areas. They rely on upstream providers (Tier 1 and Tier 2 ISPs) for connectivity to the broader internet. Tier 3 ISPs often serve as the customer-facing point of presence for residential and small business users.
Most individuals would probably want to be Tier 3 ISPs, others would look to be Tier 2 ISP who are a wholesale provider. Basically, the big providers like Bayobab serve the ISP’s and Telcos who then package and distribute the service to end users.
On the other hand, local Internet services providers and wireless service provider (WISP)’s offer internet service to end users who could be home users or enterprise businesses.
Licenses and Permits Needed
The CA, under the Kenya Information and Communications Act, 1998, is the agency mandated to regulate the ISP sector. CA is responsible for licensing all systems and services in the communications industry. Its is also mandated to manage the country’s frequency spectrum and numbering resources. Further in this case, CA is the agency type approving and accepting communications equipment meant for use in the country.
Once you have decided if you will be a Tier 2 or Tier 3 operator in Kenya, you have some fees to pay the CA. You will also need Applications Service Providers (ASP) license from the CA. There is a flat rate Licence Application Fee of KES 5000 that is non-refundable.
The authority charges an Initial Operating License Fee, an Annual Operating Fee, and an Access Fee for Frequency Spectrum. The initial operating license fee calculated as either 0.4% of the annual gross turnover or a minimum of KES 800,000, whichever amount is greater. Lastly, Annual Spectrum will be charged. The stated ISP fees charged by CA are as below.
According to the CA, “Annual Licence fees are subject to a monthly interest of 2% where it remains unpaid ninety (90) days after it becomes due.” The license fees and license periods are determined based on the market segment to be serviced.
ISPs may need a Network Facilities Provider (NFP) license, this is especially necessary for Tier 2 ISPs who intend to build their own Fiber or Wireless network for distributing the internet. The NFP license enables network companies to roll out or lay fibre.
Local Government Business Permits are needed. Before filling the CA’s application form, take note the company needs to have met the following requirements:
- The entity should be registered in Kenya as a company, sole proprietor or partnership.
- Have a duly registered office and permanent premises in Kenya.
- Provide details of shareholders and directors.
- Issue at least 30% of its shares to Kenyans on or before the end of three years after receiving a license.
- Provide evidence of compliance with tax requirement.
You can read the instructions from the CA here. Further, relevant wayleaves will be needed later for areas where infrastructure is to be deployed.
Also, an IP Transit carrier to purchase internet access in large quantities for resale to customers is needed. Don’t forget, to operate as an ISP, you must own Autonomous System (AS) numbers and IP addresses, which requires membership in the African Network Information Centre (Afrinic).
Internet Infrastructure and Security Needs
Once you have your license, the next part is deploying your infrastructure. This phase needs a huge capital output and reliance on competence of personnel. However, you can choose to skip most of this heavy lifting by tapping into resources of a company like Bayobab Kenya.
The company has invested heavily in National Long distance and metro fibre infrastructure and with PoPs in major towns that ISPs can leverage on instead of building their own. Bayobab Kenya’s IPT services benefits the new ISPs through its superior routing and hence quality. Needless to say, an ISP wants good quality, speed and high availability to gain a competitive advantage and accelerates overall business success.
READ: Bayobab Kenya: Empowering ISPs and Telcos with Layer 2 and IP Transit Services
Securing your network is also another important step you must take. Again, this is another instance where Bayobab Kenya’s IPT comes in with an added layer of security by employing ARBOR System to protect you and your customer’s IP Transit traffic against DDoS attacks. This is the first layer of security. As an ISP, you may also liaise with cyber security service providers to further protect routers with relevant firewalls.
In brief, when establishing a new ISP in Kenya the Bayobab Kenya’s Layer 2 services provide new ISPs with connectivity to submarine cables in Mombasa, interconnection between their data centers (POPs), and cost-effective expansion into multiple regions. Additionally, these services facilitate peering with major content providers and access to carrier-neutral data centers and cable landing stations.
Internet Packages and Pricing in Kenya
What next after you have set up your network and are now the latest ISP in the country? There is a need for subscription packages and pricing to get customers using your services. Based on CA statistics, Fiber to the Home (FTTH) currently has the highest number of fixed broadband subscriptions at 783,870 (56.07%). In addition, most fixed broadband subscribers (657,507) are subscribed to speeds between 2Mbps and 10Mbps.
READ: Boosting Connectivity: The growth of Home Fibre in Kenya and Bayobab Kenya’s Key Role
Most top ISP companies in Kenya offer the 10 Mbps package as the least package. Players like Zuku, Safaricom Home, Airtel 5G price this package between KES 3,000 to KES 3,500. For comparison, the average cost of an internet package is just about KES 8,000 (USD 62.66) in Sub Saharan Africa. The cheapest broadband package is KES 112.23 (USD 0.87) recorded in the Sudan.
The growing Poa Internet has a 4 Mbps monthly plan of KES 1500. New entrant VGG Connects charges the same amount for speeds of up to 6 Mbps. JTL of Faiba internet has a package of 40 mbps priced at KES 5000. Typically, home Wi-Fi prices in Kenya range from about KES 1,500 to about KES 15,000 and is usually valid for 30 days. An outlier is Starlink that has introduced a KES 1,300 package that is capped at 50 GB.
Make sure your pricing falls within the range of the area you are looking to provide internent service. The packages also need to be tailored to meet the needs of the residents and businesses in the covered region. This is where you decided whether to be a low-cost ISP offering budget monthly packages or priced higher with better monthly internet packages.
ISP Recommended Internet Speeds
A survey shows that the average download speed in Kenya is 13.69 megabits per second (Mbps). Starlink, typically offers download speeds in Kenya ranging from 50 to 250 Mbps. Another report earlier in the year ranked Telkom Kenya best for Fixed internet in Kenya. Kenya’s oldest telco registered 33.04 Mb/s a healthy gap ahead of Faiba (27.73 Mb/s) and Zuku (22.75 Mb/s).
The UK website Broadband checker ranks Vhost Meremeta Ltd as the ISP offering the highest Download speed in Kenya. The site states that 35.76 Mb/s is the average Download Speed while 30.83 Mb/s is the mean Upload Speed.
The average download speed in Sub Saharan Africa is 14.99 lagging behind Europe (141.12) and North America (104.184). Using a reliable Tier 2 ISP will enable your ISP to sustain speeds above the Kenyan average and be an ISP that can be trusted by end users.
Bayobab Kenya’s network delivers fast content access through strategic partnerships. By peering with Tier 1 providers and major content delivery networks (CDNs) in key international locations like the UK, Marseille, Amsterdam, and within Africa (Kenya, South Africa, Nigeria, Ghana), Bayobab Kenya reduces latency and improves content delivery speeds for its customers.
Fair Usage Policy
Experts estimate that an average of five people share a Home Internet subscription within a typical Kenyan household. Many broadband providers impose a data limit called a Fair Use Policy or FUP.
Excessive data consumption by a small number of users can degrade network performance for others. To ensure fair resource allocation, internet service providers often implement data usage caps. Activities like extended high-definition streaming or large file transfers can trigger these caps, as they consume substantial bandwidth.
Local FUP caps start mostly 500GB to 1TB per month for the smallest packages. This is based on experts finding that monthly data consumption of in Kenya is below 500GB on average. FUP ensures that everyone can have the best experience using the internet service you provide. It also ensures people pay for what they need and upgrade when their usage increases. This particularly discourages resellers.
FUP can also be implemented on daily usage limiting high users during peak traffic hours. How you implement this is something to consider as its not popular with consumers.
Customer Support and ISP Downtime
As an ISP, you need good customer service and support. You need to be able to give concrete answers and solutions to consumers. You also have to be able to reduce downtime on your network. If you chose to partner with a Tier 2 provider, they need to have something like Bayobab’s 24/7 customer success centre providing you timely support with regards to the quality of service being offered.
Bayobab Kenya has a team that is always ready to support in case of faults, problem management, change management, end to end service management, network analysis, and risk management. This enables timely resolution to faults in Kenya.
Further, internet outages to due faults in undersea cables are not rare. These normally leads to outages that can cause severe service disruption and customer dissatisfaction. Redundancy and rerouting help to ease such kind of problems.
Currently, Redundant National Long Distance (NLD) fiber routes run from Mombasa to Malaba and Busia border. These NLD routes offer a good layer of protection for service providers relying Bayobab Kenya’s network all the way from Mombasa to the Kenya/Uganda border. The company brings terrestrial connectivity from the Cable Landing Station (CLS) In Mombasa to the border points of Uganda.
Redundancy isn’t only important during faults, it makes it possible for Optimal routing for seamless internet connectivity.
