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.
Immaculate et al. (Fri,) studied this question.