Kenya's capital city, Nairobi. Kenya's capital city, Nairobi.

Kenya is a critical regional telecom market for investors, operators and vendors, with the sector’s revenue expected to reach KSh186 billion ($1.6bn) by 2017, according to a new report from Pyramid Research.

The research firm highlights the Kenyan telecoms market as one of the most dynamic in sub-Saharan Africa, and points to the successful mobile money applications and the deployment of LTE in 2013 as areas of ongoing potential.

“The market will remain a mobile operator’s market, as the segment’s revenue is expected to be KSh186 billion ($1.6bn) and govern the market with a staggering 96% share by 2017,” says Jessica Gendall, associate analyst at Pyramid Research.

Gendall adds that mobile services will “dominate as the basis of competition” for operators and remain a central aspect of lifestyle in urban and rural Kenya.

Furthermore, mobile money has become a stable and sizable share of revenue for Safaricom, while Airtel and Orange are trying to catch up with Safaricom, the provider of M-Pesa, by lowering their mobile money service tariffs. Similarly, the arrival of mobile broadband on multiple 3G networks and possibly also on a shared LTE network in the near future should translate to a squeezing of the revenue share generated in the fixed segment, she notes.

Click here to read CommsMEA's exclusive interview with Kenya's Minister of Telecommunications during GITEX 2012.