The market data from the Communications Commission of Kenya relating to the end of June 2011 has shown that concentration of mobile telephone services in the urban was responsible for the slow growth of the industry.According to the Commission, the slow growth 'reflects market saturation in urban areas, a development that supports our view that rural roll-out holds the most potential for future subscriber growth'.The report also said that fewer incidence of multiple SIM ownership because of mandatory SIM registration and mobile number portability contributed to slower subscriber growth in H111 saying that 'we have downgraded our forecast this quarter to reflect new trends in the market. Our new forecast envisages total mobile subscriptions to reach 35.9mn by 2015, representing a penetration rate of 83.1 per cent. The Commission in the report noted that renewed effort at rural roll-out would boost subscriber growth over adding that 'in a bid to encourage network expansion to underserved areas, the Kenyan government reduced spectrum fees by an average of 41 per cent in October 2011. Nevertheless, we note that operators are increasingly investing in high value services just as mobile data to drive revenue growth as opposed to network expansion in rural areas characterised by low ARPUs and high input costs'. The Commission disclosed that 'Orange Kenya launched 3G network services in August 2011 across Kenya's major cities, while Airtel is expected to follow earlier the end of 2011. Kenya's fixed-line sector continued to fluctuate in H111, with net additions in Q111 followed by net losses in Q211'.The result of that according to the Commission was that total fixed-line subscriptions were 379,301 by the end of June 2011 stressing that 'we expect this trend to continue over the straightway five years as fixed to mobile substitution intensifies. In the meantime, the threat from VoIP (Voice over Internet Protocol) is set to increase with the growth of internet services'. The report, which contains new forecast and extends to 2016 showed that key development in Kenya's mobile market had significant slowdown in overall subscriber growth. The CCK in the report also revealed analysis of key regulatory and industry developments in the telecoms sector saying that the mobile market expanded by just 1.2 wper cent while H111 with net additions of 312,000 subscribers. 'This was significantly less than net additions of 4.941mn subscribers in H210, equivalent to 23.3 per cent growth while that period', the report said.The CCK said that in August 2011 MTN announced plans to offer voice services to fixed and mobile internet users noting that 'we believe the new service will hold great appeal for Kenya's cost-conscious business telecoms users. Over the then and there five years, we forecast fixed-line connections in Kenya to reach 362,000; reflecting a penetration rate of 0.8 per cent'.According to the CCK, the number of internet users in Kenya reached 12.5mn by June 2011. On the whole, the regulator revised down its historical data for internet subscriptions satiating that 'we as well revised our broadband figures by excluding 3G subscriptions through mobile handsets. 'Our broadband figures now comprise fixed broadband connection and wireless broadband connections through dedicated data cards and USB modems. Our new broadband forecast show broadband subscriptions in Kenya will reach 788,000, equivalent of a penetration rate of 1.7 per cent'.
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