Kenya Power and Lighting Company (KPLC) could soon be taking on Internet Service Providers (ISPs) such as Safaricom and Wananchi Group-owned Zuku as the firm looks to connect homes in rural Kenya to the internet.
The diversification plan aimed at opening up new revenue streams was disclosed in its latest annual report. At the moment, KPLC leverages its 4,000-kilometre power transmission and distribution network to lease fibre optic cables across the country to ISPs.
KPLC was issued with a Network Facility Provider – Tier 2 License by the Communications Authority of Kenya (CA) in 2010. Now, however, it wants to elevate its offering to reach consumers directly. The move would put it in direct competition with ISPs.
It offers dark fibre on 5, 15, and 20 years Indefeasible Rights of Use (IRU) at market driven prices and has lease agreements with operators including Safaricom, Airtel, Liquid Telecom Ltd, Jamii Telecommunications, Indigo Telecommunication Ltd and Wananchi Telecom Ltd.
“In the medium to long-term, the company is exploring the lit fibre business to increase the penetration of internet connectivity, particularly in the rural areas,” KPLC disclosed in its annual report.
Business Today had reported in May details of Kenya Power’s plans to expand the national fibre optic cable network across several new routes. Tender documents informed bidders of scheduled visits to sites in parts of Nairobi, North Eastern, Mt. Kenya, Central Rift, North Rift, Western Kenya and South Nyanza – identifying routes where the cable links are to be installed.
The plan could offer pointers as to the areas KPLC will be eyeing to supply consumers with fibre optic bandwith.
The decision is informed and backed up by data. Mobile internet usage is growing fast in rural areas in Kenya, but delivering fibre optic bandwidth to consumers in rural area remains a challenge for many ISPs as it an expensive affair and most simply lack the capacity.
Urban areas such as Nairobi and Mombasa have the upper hand when it comes to availability of fibre optic bandwith.
Kenya power will be looking to tap into its 8 million+ pool of existing customers to open up what it hopes will be a key revenue stream. The firm has been undertaking State-led reforms aimed at resolving operational inefficiencies which have cost it billions over the years, including through flawed Power Purchase Agreements (PPAs).
“The company’s extensive fibre network presently offers dark fibre services to the country’s major ISPs to facilitate the provision of Internet services to the end buyer in the retail and enterprise segments across the country and neighbouring countries,” KPLC observed.