IDC has projected increased economic growth in its first Kenya IT market report.

Kenya's overall market growth is expected to remain high in 2008, peaking in mid 2009 after Kenya is connected to submarine fiber, IDC said in a statement. The submarine fiber is expected to stimulate the home and SMB (small and medium business) segments, where technology uptake has been hindered by high costs.

"There is greater optimism in 2009 as infrastructure projects in roads, railways, electricity and communications advance, lowering the cost of doing business and the cost of production," the statement read. "The investment on infrastructure is attracting greater foreign investment and enabling local business."

The report, which will be released later this week, is a culmination of IDC's research of the PC and printer, server, storage, networking, security, services and software markets in Kenya since 2006.

IDC projects that hardware will take up the biggest share of IT spending at 73.1 percent, followed by IT services at 15.7 percent and software at 11.2 percent, mainly because Kenya is still in the stage of building infrastructure.

In the telecommunication sector, the report notes that the unified licensing regime will provide the foundation for further convergence as mobile, fixed and data operators seek to maximize on their infrastructure.

With the growth, IDC projects that data centers, managed services, help desks, call centers, and application and hosting services will be key areas to watch in 2009.

The business process outsourcing sector is also expected to reap benefits, given that the government is fully supporting efforts to lower the cost of bandwidth.

The retail market channel is expected to grow rapidly due to the growing wireless data connectivity offerings from wireless and mobile network operators, read the statement. The continued acquisition of skills will force traditional computer sellers to shift focus to value-added services and end-to-end solutions through strategic alliances with hardware and software vendors.