Mobile Virtual Network Operators Break New Ground in Kenya

The Communications Authority of Kenya (CA) recently made strides in technological advancements by licensing three distinct Application Service Providers to distribute Mobile Virtual Networks Operators (MVNOs) services in Kenya. Capitalizing on this platform, these operators plan on providing a suite of application services, key among them being mobile money transfer.

In a press statement, the CA emphasized that the objective behind licensing these modern services seeks to foster innovation in the information and communications technology (ICT) sector. With this evolution, it is clear that meaningful competition will arise in various market segments, specifically attracting numerous local investors to the burgeoning tech scene.

In the grand scheme of things, the healthy competition and innovation stirred up by the entry of MVNOs into the market will offer consumers more extensive services, giving them value for their money. Concurrently, this shift is projected to act as a catalyst for the economic development of the country.

One of the licensed MVNOs, Finserve Africa Limited, which received an Application Service Provider licence, has publicly declared its intent to execute mobile payment services on its platform using cutting-edge technology. This technology includes the use of a thin SIM card or overlay SIM, making it a vanguard in fostering world-class innovations in the sector.

However, no stride in innovation is without its skeptics. This move has been met with resistance from one Mobile Network Operator, Safaricom. The telecom giant has claimed that the dual use of the overlay SIM alongside any GSM handset may interrupt and intercept communication. Furthermore, Safaricom argues that this action may open up vulnerabilities in the network and infringe on existing intellectual property rights.

In a bid to address this concern, the Authority collaborated with the Central Bank of Kenya, the regulator of mobile money transfer services, for an in-depth investigation. They worked closely with Safaricom Limited and Finserve Kenya Limited on the issue, holding separate hearings on the matter.

Following this rigorous consultative procedure, the verdict holds that the thin SIM complies with all minimum mandatory international standards. The test results conducted on Taisys thin SIM revealed that it complied with the applicable ISO and ETSI standards.

As a result of the investigation, the Communications Authority of Kenya made several significant decisions regarding the use of thin SIM cards in the Kenyan market. They determined that there is not enough evidence to block the thin SIM’s entry into the Kenyan market, allowing its use under strict observation for a year. During this period, the Authority will be hiring a reputable international firm to conduct a security audit on all SIM cards, focusing particularly on the thin SIM’s usage in mobile money transfer services.

The Board of the Authority emphasized the need for robust mobile platforms, particularly secure payment systems, but also those that allow for seamless interconnectivity with other services within the sector. In supporting this initiative, the Authority is undoubtedly advocating for innovation within the industry for the greater benefit of all Kenyans.

This article was updated in 2025 to reflect modern realities.
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