The Competition Authority of Kenya (CAK) has warned real estate developers and internet service providers (ISPs) against signing exclusive broadband deals that shut out rival firms, in a move aimed at protecting consumers and fostering competition in the country’s digital economy.
- •In a strongly worded public notice issued on Tuesday, the Competition Authority of Kenya (CAK) declared that the practice of locking in specific ISPs for entire residential developments, to the exclusion of others, constitutes a violation of Kenya’s Competition Act.
- •The Authority also said that the practice could attract stiff penalties, including fines of up to 10% of a company’s gross turnover or imprisonment for a maximum of five years.
- •The CAK said that these restrictive agreements are also harmful to consumers who are denied access to competitive pricing, better service quality, and innovation.
“It has come to the Authority’s attention, through market surveillance and numerous consumer complaints, that property developers and estate managers are signing exclusive contracts with specific Internet Service Providers and restricting competing firms from offering alternative services,” said Director-General David Kemei.
“This conduct by ISPs denies consumers the benefits of competition which include fair pricing, enhanced service quality, and innovative solutions,” Kemei added.
The development comes amid a surge in high-density housing estates across Nairobi and other urban centers, many of which now come bundled with pre-selected ISPs. While marketed as a convenience, critics say these arrangements often leave tenants with poor services and no recourse to back out.
Kenya’s fixed internet market is witnessing a surge in competition, driven by the rapid rise of alternative providers like Starlink and Vilcom Network Limited. According to the Communications Authority, satellite internet usage soared by 74.9% in the last quarter of 2024, propelled by growing adoption of Starlink’s Low Earth Orbit (LEO) services.
This has disrupted traditional dynamics and intensified rivalry in a sector long dominated by Safaricom, Jamii Telecom, and Wananchi Group —who are now actively digging their claws in exclusive arrangements to survive.
