Samsung Says High Taxation & Shipment Costs Killing The Mobile Industry in Kenya

Samsung plays a huge role in the growth of mobile penetration in the region.

4G has become the dominant technology in East Africa

2025 presents an exciting opportunity for the region’s mobile industry

High taxation on mobile services and devices, energy costs, shipment costs and the need for significant investment in infrastructure

The East African Community (EAC) boasts a 100% mobile penetration rate, surpassing Africa’s average of 92% and nearing the global average of 111%.

According to the report, Kenya leads with a penetration rate of 129%, followed by Tanzania at 113%. Mobile subscriptions have grown significantly, supported by the affordability of devices and widespread adoption of mobile money services.

Samsung says it has played a huge role in the growth of mobile penetration in the region.

“As Samsung I believe we have played a key role in this through our Knox technology that allows our partners; Watu Simu and Mkopa to drive the buy now pay later model of business. This is reflected in our 33% single brand market share in Kenya,” said Anthony Hutia, Head of Mobile Experience Division, Samsung East Africa.

Hutia adds that 4G has become the dominant technology in East Africa, with adoption set to increase significantly by 2030. However, while 5G remains in its infancy, and with significantly slow adoption. Countries like Kenya are leading the charge with initial deployments. By 2030, while 4G will likely have more connections than 5G, 5G’s superior speed and low latency will revolutionize IoT, smart homes, and smart city solutions.

“5G technology is rapidly transforming connectivity, offering faster internet speeds and reduced latency. Samsung is a leading player in 5G technology, and we are collaborating with network providers to ensure compatibility with our devices, including the S-series, A-series, and foldables,” Hutia said.

Mobile internet penetration in the region grew to an average of 61% in 2023, up from 49% in 2022. Kenya leads at 72%, followed by Tanzania at 55%. The availability of affordable smartphones and competitive data pricing are key drivers of this growth.

The year 2024 witnessed more launches of affordable smartphones with Samsung increasing its footprint across the East African region by opening about ten Samsung Experience Stores (SES) in the region to ensure further penetration in East Africa. Samsung also has its eye on Ethiopia where the mobile phone penetration is currently on the rise with 61%, as a brand, Samsung is looking forward to driving smartphone penetration in this market in 2025 through strategic partnerships with device financing partners.

According to Samsung, the year 2025 presents an exciting opportunity for the region’s mobile industry.

“The industry is poised for significant growth and transformation driven by several key trends. The rollout of 5G networks will accelerate, offering faster speeds and lower latency, enabling innovative services. Higher smartphone penetration and expanding IoT applications. Investments in infrastructure and competitive pricing will likely bridge the digital divide,” said Hutia.

Additionally, mobile money and data services are expected to play pivotal roles in enhancing digital inclusion and economic growth. However, as the digital landscape expands, he notes that cybersecurity threats will also increase and therefore strong cybersecurity measures and data privacy regulations need to be taken to protect consumer data and business operations.

In East Africa, the mobile industry is driving growth through innovations in digital education, remote jobs, financial inclusion such as mobile money, and improved access to services. The sector also supports job creation and boosts GDP, with increasing contributions expected from IoT and AI technologies. Kenya and Tanzania are leaders with mobile penetration rates of 75% and 81%, respectively, largely due to platforms like M-Pesa. Governments have also promoted mobile money for public payments, further boosting socio-economic development in the region.

However, challenges remain.

“Some of the challenges facing our industry include high taxation on mobile services and devices, energy costs, shipment costs and the need for significant investment in infrastructure. Additionally, there is a high usage gap driven by limited affordability and low digital literacy in certain rural areas,” said Hutia.

There is also the issue of affordability and competition but Samsung is addressing these by offering a range of mobile devices at affordable prices, experience/service stores across the region, and is always innovating to stay ahead in the industry.

Hutia says the rise of AI will significantly shape the mobile industry by 2025, both in East Africa and globally. In 2024, Samsung launched its first AI-powered smartphones, the Galaxy S24 series. The lineup included the S24, S24+, and S24 Ultra, with advanced AI features like Live Translate for real-time call translations, Photo Assist for intelligent photo editing, and Circle to Search with Google for quick searches by simply drawing a circle. Samsung has also expanded its AI capabilities to other phone models, highlighting its commitment to enhancing user experience and redefining mobile technology through AI.

“Mobile operators will continue to leverage AI for energy management, as demonstrated by Safaricom’s AI-powered systems for reducing energy consumption. By 2025, such solutions are likely to become industry standards. AI-powered fraud detection and security systems will safeguard digital assets. Further than technological advancements, AI will enhance digital literacy and accessibility. To fully realize AI’s transformative potential, strategic investments, strong partnerships, and responsible governance frameworks will be essential,” Hutia concluded.

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Sam Wakoba

Taking you on tour through Africa’s tech and business ecosystem, one story at a time since 2010!
Based out of Nairobi, Kenya, Sam is the founder and managing director of Moran Media, which runs  TechMoran.com, various other digital platforms and a startup incubation hub for Kenya’s youthful entrepreneurs.
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