Yes, More players will lower prices but so will MVNOs. I do believe the government can subsidize internet costs drastically by removing taxes on carrier products - airtime, bundles etc. Lower prices will result in a near immediate uptake of carrier services.
Subsidies seem like musical chairs - taxing citizens then using our taxes to subsidize carrier costs is less efficient than just removing the taxes altogether. This can be done for a brief period to give carriers time to develop their network - 3 years, 5 max - then taxes come back. The agreement of course would be carriers IMMEDIATELY lower their price offerings.
Safaricon would be the one to watch closest lest it adds hidden charges for valueless services to continue making more money.