This report considers the case of broadband in Kenya and the manner in which the country has tackled its capacity challenges. Kenya has a natural geographic advantage, being strategically positioned on the East Coast of Africa. Its government-led “build it and they will come” approach to broadband development has leveraged that advantage, and has played a major role in dramatically increasing fibre optic backbone capacity. Many of Kenya’s milestones have been realized in less than five years – three cables had landed by the end of 2010 changing the face of the broadband market. The country has gone from relying on satellite for international capacity, to having access to almost four terabits over fibre from the three cables combined.

Although the landing of the cables is merely a first step, it has already resulted in an 80 percent decrease in wholesale bandwidth costs. Lower prices and greater availability are expected to increase access to the Internet as well as to promote the continued spread of sophisticated mobile applications and services and consequently improve opportunities for the creation of and access to information and knowledge. Affordable broadband is expected to increase Kenya’s competitiveness, particularly in the Business Process Outsourcing (BPO) sector, and to encourage entrepreneurship and innovation.

What the Kenyan case demonstrates is that the promotion of broadband capacity is multifaceted and takes place on a number of different levels. This report analyses the approach that has been taken to addressing network capacity challenges (supply side), as well as human capacity considerations affecting usage and uptake (demand side) by considering:

• the wholesale market for broadband connectivity (domestic and international backbone connectivity);

• the retail market for broadband access (i.e. “last mile connectivity”); and

• the development of services, applications and content.

With an estimated fixed and mobile broadband penetration rate of 2 subscriptions per 100 people in 2010, Kenya still has significant progress to make with respect to broadband uptake. Stimulating demand and usage by Kenyan citizens and the public and private sector remains a challenge. Kenya has, largely through the government, taken an innovative and pro-active approach to putting the user at the centre and addressing the other elements of the broadband ecosystem, such as education, literacy, applications and content. This has been done through good regulation, the promotion of polices relating to ICT in education, the subsidization of relevant content and application projects, and facilitating creative Public Private Partnerships (PPPs).

This report finds that much of Kenya’s success is due to four important factors:

• A clear national vision articulated in Vision 2030;
• Strong leadership and direction;
• A credible regulatory, policy and institutional framework; and
• Leveraging the strength of the public and private sectors through PPPs.

The initiatives discussed in the report possess elements of these traits across all aspects of the broadband ecosystem.

The Kenyan experience is inspiring, yet it has not been perfect. There have been a few hiccups in terms of the pace of implementation, and overlaps in the policy and institutional framework. These are discussed in this report to provide a proper context for the Kenyan broadband story and to enable countries to learn from Kenya’s experiences.