AI TECHNOLOGY INTEGRATION AND COMPETITIVE ADVANTAGE: EVIDENCE FROM TELECOMMUNICATIONS FIRMS IN NAIROBI CITY COUNTY, KENYA

Purpose of Study: This study investigated the
effect of AI technology integration on the
competitive advantage of telecommunications
firms in Nairobi City County, Kenya, addressing
the gap between AI adoption and measurable
performance outcomes in emerging market
contexts where infrastructure and skills
constraints moderate technology returns.
Methodology: A descriptive correlational
design was employed, collecting primary data
from 67 senior managers across four licensed
telecommunications firms (Safaricom, Airtel,
Telkom, Jamii) using structured questionnaires.
The study was anchored in the Resource-Based
View, Dynamic Capabilities Theory, and
Technology Acceptance Model. Multiple
regression analysis was conducted to estimate
the independent contribution of AI technology
integration to competitive advantage.
Findings: AI technology integration emerged as
the strongest independent predictor of
competitive advantage (β = 0.412, p < 0.001),
with the overall model explaining 71.4% of
variance in competitive outcomes (Adjusted R²
= 0.701). Operational efficiency improvement
was the highest-rated competitive gain (M =
3.94), while market share improvement rated
lowest (M = 3.54). A notable integration
protocol gap was identified: formalisation of
documented AI integration protocols (M = 3.52)
lagged behind operational integration
capabilities (M = 3.89). This pattern reflects the
distinction in dynamic capabilities literature
between operational capabilities and higher-
order strategic reconfiguring capabilities,
representing a key barrier to sustainable
competitive advantage.
Conclusion: AI technology integration
significantly enhances competitive advantage in
Kenya's telecommunications sector, affirming
RBV and DCT generalisability to emerging
markets. Addressing the integration protocol gap
through formalised, documented processes and
governance structures is essential for translating
episodic AI adoption into sustained,
institutionally embedded competitive
differentiation.