Kenya Power Ventures Into The ISP Business Following Acquisition Of A Tier 2 License

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Kenya Power, Kenya’s sole distributor of electricity, has been issued with a Network Facility Provider – Tier 2 License by the country’s Communications Authority. The license designates Kenya Power as a Public Data Network Operator, allowing it to provide internet access to individuals and other operators.

The power distributor already has 1581 kilometers of commissioned OPGW (optical ground wire) fiber, which is designed to carry both electricity and data in a single cable, with 5, 15, and 20 year leases available.

In a press release, Kenya Power announced that it has also developed a telecommunications business unit to be known as U-Telco for its fibre optic business.

In order to fully utilize this capacity, the company has signed lease agreements with a number of telecommunications operators including Safaricom, Airtel, Liquid Telecom, Jamii Telecommunications, Indigo Telecommunications and Wananchi Group to provide a fibre backbone for their internet services.

“The new outfit will be responsible for development of fibre-to-the-home which is a major business direction,” said Kenya Power managing director Ben Chumo during the company’s annual general meeting.

“We already have the necessary infrastructure in place, therefore giving this extra service to our customers will not require any major investment. We shall not put our lines underground where it is unsafe but along our power lines.”

Venturing into the fibre business without having to invest in infrastructure presents a great advantage to Kenya Power, reducing the overhead that would otherwise have been transferred to the end-user. This is likely to cut down further the cost of broadband internet in Kenya, making the ISP market even more competitive.

Kenya currently enjoys a leading role as the hub of internet development in Africa. Nairobi has been touted as one of the most connected cities in Sub-Saharan Africa.

Through U-Telco, Kenya Power aims to deliver a complete line of telecommunications products to CCK-licensed service providers to meet their bandwidth needs for voice, data and video.

Mr. Chumo however did not offer specific timelines for the diversification but shareholders have approved the creation of the new subsidiary to spearhead the venture.

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