Real estate developers and residential estate managers have been barred from entering exclusive agreements with internet service providers (ISPs) as the Competition Authority of Kenya (CAK) moves to open up consumer choices and curb rising monopolies in housing estates.
Market surveillance by the CAK has revealed that developers and estate managers often sign exclusive deals with specific ISPs, granting them sole rights to provide internet services to tenants and effectively locking out rival providers and limiting options for residents.
The regulator has now prohibited such arrangements, directing developers and managers to “cease engaging in exclusive conduct and prevent its recurrence,” and to “facilitate the entry of competitor ISPs into their developments.”
“Parties are cautioned that exclusive dealings, including those entered into by certain ISPs and real estate developers or estate managers, deny Kenyan consumers choice of services that meet their specific needs, contrary to the Constitution of Kenya and the [Competition] Act,” said CAK Director-General David Kemei in a public notice.
“This conduct by ISPs denies consumers the benefits of competition, including fair pricing, enhanced service quality, and innovative solutions. Further, foreclosing competitor ISPs from accessing certain markets risks creating monopoly-like enterprises in the affected estates.”
Entities found to be in breach risk penalties of up to five years' imprisonment and a fine of either Sh10 million or 10 percent of their gross annual turnover, whichever is higher.
Kenya’s internet market, which has long been dominated by a few major players, has recently seen disruption from new entrants such as Starlink, which has already captured a market share of more than one percent in its first year of operation.
According to the latest data, Safaricom leads the market with a 36.1 percent share, followed by Jamii Telecoms at 23.6 percent, Wananchi Group at 15.4 percent, and Poa Internet at 13.8 percent.
The National Building Code of 2024 mandates that all new buildings be fitted with fibre optic ducts and tunnels to facilitate internet connectivity throughout housing units and facilities.
Although developers invest their private capital in the property and have a right to choose the service provider, the new building regulations treat internet as an essential infrastructure, just like water and electricity, making it necessary to provide tenants with a range of options.
The CAK now wants developers to allow all licensed ISPs access to these installations, moving away from the current situation where only one provider — contracted exclusively by the developer — is permitted to connect residents.
Similar regulations have been enforced in other jurisdictions around the world, including Singapore, the United States, South Africa and the United Kingdom, all of which have demanded options for tenants.
