The Kenya Network Information Center (KeNIC) announced a price increase for .KE domains, effective February 3, 2025. This comes at a time when the total number of .KE domain registrations has remained stagnant at around 100,000 for several years, despite previous efforts to spur growth through price reductions. This blog explores the implications of the price adjustment, analyzes the competition faced by .KE domains, and evaluates the challenges and opportunities for KeNIC in a competitive domain market.

KeNIC has struggled to significantly grow its domain registrations beyond the 100,000 mark. Despite halving third-level domain prices nearly five years ago to attract more users, the impact on new registrations has been minimal.

In 2019, .KE domains stood at 93,446 registrations, and while they crossed the 100,000 mark in subsequent years, growth has been slow. Factors contributing to this stagnation include competition from Generic Top-Level Domains (gTLDs) like .com and .org, new gTLDs such as .xyz .shop, and .africa which offer attractive alternatives for businesses and individuals. Other factors have been trust Issues or concerns over potential political interference. There is also limited marketing to promote .KE domains, which have hindered adoption.

What is the cost under the new pricing structure?

1. Second-Level Domains (e.g., yourcompany.ke): Remain unchanged at Ksh 2,500 + VAT (approximately $19.31 USD).
2. Third-Level Domains (e.g., yourcompany.co.ke): Increased from Ksh 700 + VAT (approximately $5.41 USD) to Ksh 999 + VAT (approximately $7.72 USD). This represents a 43% increase.
3. Transfer Fees: Previously free, now set at Ksh 999 + VAT (approximately $7.72 USD). For end-users, registrars typically add markups to these wholesale prices. As a result, third-level domains like .co.ke may cost between Ksh 1,200 and Ksh 2,000 annually after the increase.

What does the competition look like?

.com, the most popular TLD globally with over 156 million registrations as of Q3 2024. It is favored for its global appeal. .org is popular among non-profits and organizations, with strong renewal rates of over 85%. New gTLDs like .xyz, .shop, and .online offer creative branding opportunities at competitive prices but often struggle with low renewal rates. Other Country-Code TLDs (ccTLDs) like South Africa’s .za; with over 1.26 million domains registered, dominate the African ccTLD market due to its affordability and robust infrastructure. Tanzania’s .co.tz and Rwanda’s .co.rw are priced at approximately $12–$13 annually. Social media, over-the-top services, and online carts continue to give ccTLDs a run for their money as many businesses use applications like WhatsApp, Facebook, LinkedIn, TikTok, and Instagram; and online shops like Jiji or Jumia to sell their goods and services.

Why competitors are thriving.

1. Affordability: Many gTLDs and ccTLDs are priced lower for their market segment, and income capacity of the target audience.
2. Patriotism: Domains like .de (Germany), .za (South Africa), and .cn (China) have achieved larger registration levels due to a combination of factors, including practical advantages, market conditions, and, to some extent, patriotism.
3. Global Reach: Although all domains are created equal and provide the same services of reaching your services, domains like .com are preferred by businesses targeting international markets.
4. Branding Flexibility: New gTLDs allow businesses to choose extensions that align with their identity (e.g., .tech, .store, .africa, .digital).

KeNIC has cited sustainability, investment in growth, and inflation as the reasons for the price increase. It is yet to be seen if the reasons will materialise.

The domain price increase by KeNIC faces the following headwinds:

1. Lack of public participation. KENIC has not been able to demonstrate the process they went through to increase the domain prices.
2. Higher Costs for End-Users: Registrars will pass on these costs to customers, potentially making .KE domains less competitive.
3. Limited Appeal for Small Businesses: Higher costs may deter startups or individuals from adopting local domains.
4. Missed Growth Opportunities: Without addressing trust issues or launching aggressive marketing campaigns, KeNIC risks losing potential customers to competitors.

Recommendations for KeNIC: To overcome stagnation and compete effectively.

1. Public participation: The DNS system embodies multistakeholderism, emphasizing inclusivity and collaboration in decision-making processes. Similarly, Kenya’s Constitution enshrines public participation as a fundamental national value and principle of governance. However, it remains unclear whether KeNIC engaged stakeholders regarding the recent price increase. As a public-private partnership responsible for managing Kenya’s .KE domain, KeNIC enjoys the goodwill of diverse stakeholders, including registrants, registrars, and regulators. These stakeholders possess a deep understanding of Kenya’s DNS ecosystem and should be widely consulted on decisions like price changes that could significantly impact their businesses and ultimately affect domain registration rates.
2. Enhance Marketing Efforts: To boost adoption of Kenya’s ccTLDs (.ke domains), KeNIC should enhance its marketing efforts by launching targeted campaigns that highlight the advantages of using local domains for Kenyan businesses, such as improved local SEO, increased trust among domestic audiences, and alignment with Kenya’s national identity. Additionally, promoting second-level domains like .ke as premium options for established brands can position them as exclusive and prestigious choices, appealing to businesses seeking to elevate their credibility and visibility in the digital space.
3. Address Trust Issues: To address trust issues and foster confidence in Kenya’s DNS ecosystem, KeNIC should prioritize improving infrastructure reliability to minimize downtime and ensure uninterrupted service for users. Additionally, increasing transparency in operations—particularly in dispute resolution processes—can alleviate concerns about potential political interference and demonstrate a commitment to fairness and accountability, thereby strengthening stakeholder trust.
4. Introduce Incentives: To drive the adoption of .KE domains, KeNIC should introduce incentives such as discounts for bulk registrations or multi-year renewals, making local domains more cost-effective for businesses and individuals. Additionally, providing subsidies or grants to startups can lower entry barriers, encourage innovation, and promote the use of .KE domains among emerging enterprises, ultimately strengthening Kenya’s digital ecosystem and fostering long-term growth.
5. Simplify Pricing Models: To enhance customer satisfaction and trust, KeNIC should simplify its pricing models by ensuring uniformity between registration and renewal fees. Transparent and predictable pricing eliminates confusion, prevents unexpected financial burdens during renewals, and allows customers to make informed decisions, fostering long-term loyalty and confidence in the .KE domain ecosystem.

The stagnation in .KE domain registrations highlights the challenges faced by KeNIC in a competitive market dominated by gTLDs like .com and ngTLDs from other regions. While the recent price increase aims to ensure sustainability, it risks further alienating cost-sensitive users unless accompanied by strategic initiatives to boost adoption. KeNIC must focus on building trust, simplifying pricing models, aggressively marketing the benefits of .KE domains, and ensuring meaningful public participation in its decision-making processes. Engaging stakeholders such as businesses, organizations, schools, and researchers will foster transparency, inclusivity, and goodwill. By addressing these challenges head-on, KeNIC can position itself as a key player in Kenya’s digital transformation journey while fostering local online growth.

We should all aim to support KeNIC and encourage a domain for everyone in Kenya, especially for businesses, organizations, schools, researchers, and beyond.