Kenya's telecom, digital services and cyber security sectors due for expansion
Much like the rest of the continent, Kenya is riding a wave of digital advancement, and the advancement of technology is expected to impact the telecommunications, digital services and cyber security markets in particular. Cumulative revenues from the three sectors are expected to cross $9 billion by 2022.
The UK’s Foreign & Commonwealth Office (FCO) has commissioned consulting and market research firm Frost & Sullivan to conduct studies on the digital environments of a number of developing economies, with the primary objective of identifying key opportunities for businesses active in the domain.
Kenya was one of the economies examined, and the consulting firm highlighted some key trends prevalent in the country’s digital landscape. Kenya is expected to grow at 6% up until 2020, but is hindered by a general lack of transparency and a sluggish bureaucratic framework, particularly with respect to tender processes.
The burden created by rampant corruption is accentuated by the high levels of public debt prevalent in the economy. Nevertheless, Kenya is in sync with much of Africa in terms of an increase in digitalisation, which might go a long way in promoting economic growth and eliminating inefficiencies.
Much like other economies, digital advancement has hit the financial sector in Kenya first. As per the report, mobile payments are popular in Kenya, primarily due to the presence of a number of convenient applications such as M-Pesa. In terms of telecommunications, mobile connectivity is fairly comprehensive across the country, according to the report, although some rural areas still require an improvement in mobile infrastructure.
The report identifies key opportunities for the three sectors – telecommunications, digital services and cyber security – drawing on its findings from the study.
In the telecoms sector, for instance, the increasing permeation of technology into the financial sector to encapsulate financial transactions is likely to substantially increase the reliance on mobile devices. Greater usage entails higher data consumption, which will drive the sector’s revenues to nearly $3.5 billion by 2022, up from its current level of $2.75 billion.
The digital service sector is perhaps the most diversified of these domains, capturing FinTech, cloud computing, and platform-as-a-service offerings within its operations. As a result, the report anticipates that the market will more than double between now and 2022, from $2.35 billion to $5.15 billion.
Lastly, growth in the two sectors above almost inevitably signifies growth for cyber security services, as an increased reliance on digitalisation brings with it a new range of threats from cyber attacks. The report predicts that this scenario will push the cyber security market from its current levels of $380 million to $516 million.
Cyber security includes a range of services such as managed network security, endpoint security, and even managed application security. Businesses in Kenya have begun to offer services in this domain, and the market is also witnessing the emergence of training centres looking to promote the technical know-how to successfully implement cyber security systems.