Authority weighs light-touch rules as OTT platforms reshape Kenya’s digital economy

A new study commissioned by the Communications Authority of Kenya (CA) recommends a light-touch regulatory approach to preserve innovation while addressing competition, consumer protection and market oversight concerns.

Conducted by Detecon under the Kenya Digital Economy Project (KDEAP), the study finds that over‑the‑top (OTT) services and online streaming have produced a net positive economic impact despite disrupting traditional telecom and broadcasting revenues.

Supported by rising smartphone penetration and a young, digitally connected population, Kenya’s OTT market is expanding rapidly. Video streaming is now the primary driver of mobile data use; streaming users consume nearly three times the data of the average subscriber, boosting demand for broadband infrastructure. Although revenues from voice and SMS have fallen, higher data usage has largely offset those losses.

Using Kenya’s GDP of Sh16.2 trillion, the study estimates the digital economy contributes about 9% of output, with OTT and streaming accounting for 15–25% of digital activity through platform revenues, consumer spending and spillover effects. The report also highlights consumer gains—cheaper communications, broader information access, educational content and entertainment—and job growth across software development, digital marketing, content creation and related services.

However, regulation has lagged behind technological change. Licensed telecoms and broadcasters pay fees and meet service obligations, while many global OTT providers deliver services over the same infrastructure without equivalent regulatory responsibilities. This creates competitive imbalances and limits the Authority’s access to reliable market data. Oversight is fragmented across the Kenya Information and Communications Act, the Data Protection Act, tax laws, cybercrime statutes and content regulations, and enforcement is complicated by cross‑border data flows.

The study evaluated four regulatory options: a dedicated OTT licensing regime (high oversight but risk of deterring investment); extending Content Service Provider licenses (risk of over‑regulation); a recommended class‑licensing framework based on mandatory notification (improves oversight with minimal compliance burden, though foreign platform participation would be voluntary); and retaining the current framework (flexible but leaving uncertainties unresolved).

The report concludes that proportionate, light‑touch regulation—rather than restrictive measures—will be critical to sustaining investment and reinforcing Kenya’s standing as a leading digital economy in Africa.