Telecom operators in Kenya are sounding the alarm over a dual crisis threatening their bottom line: county taxes that are piling up without oversight, and a surge of illegal internet service providers operating outside the law. The warning, reported by Business Daily Africa, comes as the country’s telecom sector — which pulled in KES 382.6 billion ($2.9 billion) in 2022-2023 — faces mounting pressure from local governments and unlicensed competitors. This isn’t just a compliance issue. It’s a survival challenge.
The Tax Trap: County Levies on Infrastructure
Under Kenya’s 2010 devolved constitution, each of the country’s 47 counties has the right to impose service charges on businesses operating within their borders. But what was meant to empower local governance has, in practice, become a patchwork of unpredictable fees. Telecom companies say they’re being hit with charges for everything from tower permits to road access rights — sometimes multiple times over, by different counties along the same fiber route. One operator, speaking off-record, described it as "taxation by ambush." A single fiber cable stretching from Nairobi to Mombasa might pass through eight counties, each demanding its own fee, with no standardized rate or transparent process. The result? Operational costs are creeping up, and network expansion is slowing down — especially in rural areas where margins are already thin.Illegal Providers: The Shadow Network
Meanwhile, a parallel internet economy is thriving in the shadows. Unlicensed operators, often using unregistered equipment in the 2.4 GHz and 5 GHz bands, are selling Wi-Fi access in informal settlements, markets, and even university campuses. These providers don’t pay spectrum fees, don’t comply with data privacy rules, and don’t contribute to national infrastructure funds. Worse, they undercut licensed providers on price — sometimes by 60% — luring customers away with barebones service that’s often unreliable. The Communications Authority of Kenya (CA) estimates there are thousands of such operators, but enforcement remains patchy. In places like Kisumu and Nakuru, residents report better connectivity from these illegal networks than from Safaricom’s own towers. That’s not just unfair competition — it’s undermining the entire regulatory framework.Who’s Affected? Everyone, Especially the Poor
It’s easy to think this is just a corporate grievance. But it’s not. When telcos are forced to spend more on bribes and legal fees, they pass those costs on. When illegal providers collapse — and many do — customers lose access without recourse. And when new infrastructure stalls, rural communities get left behind. In Bungoma County, a school that relied on a licensed ISP for e-learning saw its connection drop after a local illegal provider shut down following a CA raid. The school had no backup. The teacher? She’s now teaching from a notebook. This isn’t just about profits. It’s about digital inclusion.The Silent Players: Who’s Speaking Up?
Surprisingly, there’s been no public statement from Safaricom PLC, Airtel Kenya, Telkom Kenya, or Faiba 4G. No press releases. No lobbying leaks. Industry groups like the Association of Communication Enterprises (ACE) Kenya and KICTANet haven’t issued joint statements either. That silence speaks volumes. Are they negotiating behind closed doors? Are they afraid of retaliation from county governors? Or have they simply accepted this as the cost of doing business in Kenya’s fractured governance system?What’s Next? A Regulatory Crossroads
The Communications Authority of Kenya has the legal authority to crack down on illegal providers — but lacks the manpower. Meanwhile, the National Treasury has no clear policy on county-level telecom levies. The Kenya Private Sector Alliance (KEPSA) has raised the issue in past forums, but without follow-up. What’s needed is a national framework — one that caps county fees, mandates transparency, and gives the CA real teeth to shut down rogue operators. Without it, Kenya risks turning its digital ambition into a digital quagmire.Why This Matters Beyond Kenya
This isn’t just a Kenyan problem. Across East Africa, devolution has created similar regulatory gray zones. In Uganda, local governments charge for tower access. In Tanzania, unlicensed ISPs are rampant in Dar es Salaam. Rwanda, by contrast, centralized oversight early and now boasts one of Africa’s most reliable networks. Kenya had a chance to lead. Now it’s falling behind. If the government doesn’t act soon, the next generation of Kenyans might inherit a patchwork internet — fast in the cities, broken everywhere else.Frequently Asked Questions
How much are county levies costing telecom companies in Kenya?
Exact figures aren’t public, but industry insiders estimate county-level fees could be adding 8–12% to operational costs in high-density areas. In remote counties, some firms report paying over KES 500,000 annually just for permits to install a single tower — money that could otherwise go toward expanding coverage.
What makes an internet provider "illegal" in Kenya?
An ISP is illegal if it operates without a license from the Communications Authority of Kenya, uses unallocated spectrum, or installs infrastructure without permits. Many operate using consumer-grade routers or unauthorized fiber splices, bypassing national security and quality standards — making their networks vulnerable to outages and data breaches.
Why haven’t Safaricom or other major telcos spoken out publicly?
Many fear political backlash. County governors control local approvals for infrastructure, and public criticism could delay tower permits or trigger retaliatory audits. Behind the scenes, some telcos are quietly lobbying through KEPSA, but without unified action, their voice is diluted.
What’s the impact on rural internet access?
Rural areas are hit hardest. Telcos delay expansion due to unpredictable costs, while illegal providers offer unreliable service that vanishes after a few months. The result? A two-tier system: urban areas get decent connectivity, while villages get intermittent, unregulated access — deepening the digital divide.
Could this lead to higher data prices for consumers?
Yes. With rising compliance costs and shrinking margins, telcos may raise prices to offset losses. Safaricom already increased data rates by 10% in 2023 — partly due to infrastructure strain. If county taxes and illegal competition keep growing, further hikes are likely, hitting low-income users the hardest.
Has the government ever taken action against illegal ISPs?
The CA has conducted raids — notably in Nairobi’s Eastlands and Mombasa’s Kizingo in 2023 — shutting down over 200 unlicensed nodes. But without a long-term enforcement strategy or public reporting, these are temporary fixes. Operators simply reopen under new names, often within weeks.
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