Constraints to Expansion of the Telecommunication Sector in Kenya

Abstract

The telecommunication industry is among key economic pillars of many economies today. Through the growth of this industry, developing nations such as China and India have been able to record massive economic growth. This study has established that for Kenya to match the economic growth rates being experienced ion other developing nations there is need to spur the growth of the telecommunication industry.  The study thus focused on determining the challenges that are hindering the Kenyan telecommunication industry from attaining growth rates experienced in other countries. Possible solutions to these challenges were also proposed. The study divided the challenges into industry based and customer based challenges. The study was conducted across all telecommunication service providers in Meru County, Kenya with results being generalised to represent the entire industry situation. Assessed industry based challenges were inter-firm competition and changing technology. The two challenges were analysed using a 3-point Likert scale to determine the extent to which they affected growth of the telecommunication industry; both factor recorded average weights of 2.6 implying that the two factors affected the industry growth almost to a similar extent. Assessed customer based challenges were inadequate customer loyalty and changing tastes and preferences. Based on 3-point Likert scale, it was established that changing customer tastes and preferences with an average weight of 2.51 affect the industry’s growth than changing customer loyalty, which recorded an average weight of 2.41. The research also established that if implemented, the proposed solutions to both customer - based and industry based challenges would result to increased growth of the telecommunications industry.

Keywords: Telecommunication sector, Industry based challenges, Customer based challenges