The government intends to increase licensing fees for satellite communication service providers, a decision that will result in higher operational costs for major companies, including the American satellite internet provider Starlink, in Kenya.
In December, the Communications Authority of Kenya (CA) released new proposals aimed at revising the Satellite Landing Rights (SLR) license, which is mandatory for these companies to establish their operations within the country.
The SLR license grants companies the authority to land their satellite signals in Kenya.
Currently, the CA proposes to raise the initial SLR license fee from $12,500 (approximately Ksh. 1.6 million) to Ksh. 15 million.
Additionally, the regulator plans to introduce an annual operating fee of Ksh. 4 million or 0.4 percent of the companies’ annual gross turnover, whichever amount is greater.
These proposals are outlined in the Review of the Telecommunications Market Structure 2024, which is open for public comment.
Stakeholders are invited to submit their feedback on the proposed regulations by January 23, with the CA aiming to implement these changes in the 2025/2026 financial year.
The CA states that this review is intended to eliminate “certain market entry and operational barriers identified over time.”
Furthermore, the regulator aims to consolidate the Submarine Cable Landing Rights (SCLR) license, which is issued to companies that install submarine cable systems connecting to the mainland, with the SLR license to form a new category known as the Landing Rights License (LRL).
The LRL license will be applicable to entities wishing to establish terrestrial cables that merely transit through Kenya to neighboring countries, satellite hubs that exclusively serve clients outside of Kenya, and other satellite services such as telemetry, space research, and meteorological aids.
“This modification is designed to promote technology neutrality and enable investors to utilize any technology for signal landing. Moreover, this new license category will broaden its scope to accommodate a wider range of investors,” states the CA.
In addition to the initial licensing fee and the annual operational fee, companies will be obligated to pay an application fee of Ksh.5,000 for a license valid for a duration of 15 years.
These new regulations emerge amid protests from certain established players in Kenya’s internet sector, including Safaricom, regarding the introduction of satellite internet services in the country.
Starlink, a venture owned by Elon Musk, the world’s wealthiest individual, commenced operations in Kenya in July 2023, providing competition to existing companies such as Safaricom, Telkom, Faiba, and Zuku, which rely on fiber-optic technology.
The American firm has consistently offered internet packages at competitive prices along with superior speed, leading it to become the tenth-largest Internet Service Provider (ISP) in the nation.
As of June 2024, data from the Communications Authority indicated that Starlink had surpassed 8,000 subscribers.
In November, the company announced a suspension of new subscriptions in Nairobi and the surrounding regions of Kiambu, Machakos, Narok, Murang’a, and Nakuru, attributing this decision to network capacity constraints resulting from heightened demand.
