Safaricom’s potential involvement in an undersea cable project, as picked up by Kenyan media earlier this week, has sparked considerable speculation about the company’s long-term strategic direction from an Internet service provision perspective. 

As Kenya’s largest Internet Service Provider (ISP), any move by Safaricom in this space could have significant implications for the country’s digital ecosystem, at scale. However, without an official statement from Safaricom, this scenario remains speculative. Nonetheless, the idea of Safaricom pursuing its own, or co-investing in an undersea cable, raises all sorts of interesting possibilities going forward. 

Unpacking Safaricom’s Current Internet Market Dominance & Competitive Landscape

Safaricom has built a dominant position in Kenya’s internet market, holding 36.6% of the fixed internet market with 575,835 subscriptions and 63.1% of the mobile internet market with over 33.8 million subscribers as seen in the latest sector statistics report from the Communications Authority of Kenya. 

Safaricom’s extensive investments in 3G, 4G, and 5G networks, alongside fiber-to-the-home (FTTH) and fiber-to-the-business (FTTB) services, have made it a leader in both consumer and business customer segments. However, this dominance was recently challenged by Starlink, which entered Kenya offering faster and often more affordable satellite-based internet. Starlink quickly gained traction, particularly in remote areas and among businesses needing reliable connectivity in towns and cities. 

Starlink also offered incentives such as affordable equipment rental and retail availability in supermarkets like Carrefour and Naivas. However, even as Starlink’s uptake was surprisingly fast, its current subscription numbers remain tiny compared to Safaricom’s. Interestingly, despite expectations that Starlink would be most popular in underserved rural regions, many signups have occurred in urban centers like Nairobi and Mombasa — often with mixed user experiences from we can tell online. 

That being said, in response to Starlink’s entry, Safaricom upgraded its internet packages, with speed boosts such as the Bronze package increasing from 10 Mbps to 15 Mbps and the Diamond package jumping from 100 Mbps to 500 Mbps. Additionally, Safaricom has further reduced prices on its internet packages, as seen on its website. What’s surprising is that as someone using Safaricom’s Business internet service, I can personally attest that the package I have is officially capped at 100 Mbps for downloads, yet I consistently experience download speeds of over 300 Mbps! 

Why An Undersea Cable Could Make Sense For Safaricom, Or Not?

Undersea cables are the backbone of global internet infrastructure, carrying about 99% of international data traffic. They are essential for ensuring high-capacity, low-latency connections and reliable international bandwidth. Kenya is already connected to multiple undersea cables, including:

• SEACOM (6,850 Gbps): One of the earliest cables linking East Africa to Europe and Asia.
• TEAMS (4,063 Gbps): Developed in partnership with the Kenyan government and private players.
• EASSy (6,420 Gbps): Connecting Eastern and Southern Africa to Europe and Asia.
• LION 2 (810 Gbps): Serving the Indian Ocean region and providing additional connectivity to Kenya.
• DARE 1 (1,780 Gbps): A key link between Djibouti and Mombasa.
• PEACE (2,231 Gbps): The most recent addition, connecting Pakistan, East Africa, and Europe with ultra-low latency.

Despite this robust infrastructure, issues such as In March and April of 2024, multiple undersea cable cuts significantly disrupted internet services across East Africa, particularly impacting the SEACOM, TEAMS, and EASSy cables. These disruptions highlighted Kenya’s vulnerability and the critical need for additional resilience and redundancy, which could be driving Safaricom’s interest in pursuing its own undersea cable or landing rights. 

The Potential Strategic Benefits of A Dedicated Safaricom Undersea Cable

1. Enhanced Control and Capacity: If it has greater control over its bandwidth, Safaricom could ensure a more consistent and reliable internet experience, reducing congestion and minimizing service disruptions.
2. Resilience and Redundancy: A dedicated or co-owned cable could provide backup in the event of disruptions to existing cables, such as those seen last year, thus improving overall service reliability.
3. Cost Optimization: By having direct access to bandwidth, Safaricom could reduce its reliance on third-party providers, potentially lowering costs and making internet services more affordable for end users, as well as more profitable for Safaricom. 
4. Scalability for Gigabit Internet: If it has dedicated undersea cable capacity, Safaricom could roll out gigabit-level services, at scale, positioning itself as a future-proof ISP that can meet the growing demand for high-speed connectivity.

Co-Investment vs. Full Ownership: Which Way For Safaricom?

The investment required for a dedicated undersea cable can be between USD 50 million and USD 100 million, making it unlikely that Safaricom would undertake this alone. 

A more viable option would be co-investing in a consortium. This would provide Safaricom with landing rights and a share of the cable’s capacity while sharing the financial and operational responsibilities. The TEAMS cable, for example, was built through a public-private partnership involving various stakeholders, including the Kenyan government.

By joining a consortium, Safaricom could gain access to the benefits of cable ownership without bearing the full costs, aligning with its history of leveraging partnerships for infrastructure expansion. 

However, given the recent Kenyan media reports suggesting Safaricom’s interest in a dedicated cable, it is also possible the company is considering an ambitious solo approach. Indeed, its not inconceivable given Safaricom’s legacy of audacity to make eye-watering investments like it did for 3G and 4G licenses to sustain and extend its market leadership positions. 

The Starlink Factor: Does It Even Matter Where Safaricom Is Concerned? 

Starlink initially created a lot of hype in Kenya, particularly due to its ability to provide internet across remote parts of the country and its attractive incentives, such as affordable equipment and retail availability in supermarkets like Carrefour and Naivas. 

However, the reality has set in that Starlink’s satellite-based offering has a relatively narrow window of use cases. Whilst we can credit it for prompting Kenya’s incumbent ISPs to rethink bandwidth and pricing, leading to better offerings for customers, its long-term disruptive potential appears limited. 

Safaricom and other ISPs have fiber internet, which is generally faster and more reliable than satellite-based connections in areas where its available. As a result, I believe Starlink will not disrupt incumbent ISPs at scale in Kenya, especially in adequately covered regions such as Nairobi and Mombasa. 

The Bigger Picture: Safaricom’s Outsized Role in Kenya’s Vibrant Digital Economy

Kenya’s total international internet bandwidth currently stands at 24,195 Gbps and 17,411 Gbps is actively utilized so Safaricom’s involvement in an undersea cable could further enhance the country’s connectivity. 

By controlling more bandwidth, Safaricom could develop tailored solutions for businesses and consumers, such as dedicated connections for high-bandwidth users, cloud services, and international data hubs.

Such a move would not only solidify its position as the leading ISP In Kenya but also attract international companies seeking reliable internet services in East Africa. Moreover, it would support Kenya’s ambition to become a regional technology and innovation hub for the greater East African region. 

Is A Dedicated Undersea Cable A Strategic Option Worth Considering For Safaricom? 

Although Safaricom’s involvement in an undersea cable is still speculative, the potential benefits are clear. Enhanced control over bandwidth, improved service resilience, and reduced costs could help it maintain its competitive edge against emerging rivals like Starlink. 

Given that Kenya’s and the global digital landscape is evolving rapidly, investing in an undersea cable — whether through co-investment or securing landing rights — could be a game-changer. 

Ultimately, one thing we all know about Safaricom is that they don’t scare easily and don’t mind putting their money where their mouth is so quite honestly anything is possible going forward for the behemoth that is Safaricom.