Kenya Power believes that it is in a better position to distribute high-speed internet to the rural parts of the country.
This is not news, because in the past, we have heard of similar plans, but they have never really materialized. Also, bear in mind that a project of that caliber is huge, and can take substantial amounts of money to initiate and complete. With its loss-making streak, it is not clear how this will be actualized.
It is also important to note that the rural parts of Kenya experience constant power outages and the company has a knack for slow responses whenever such issues come up.
Nevertheless, the country is experiencing substantial growth in the number of people using internet services. Those in the rural areas do not have any kind of broadband or a fixed connection they can tap into because the services are mostly a reserve of Kenya’s leading urban centres.
Even the likes of Safaricom Home Fibre, JTL, and Zuku are limited to regions where the companies running them can find customers, and rural Kenya does not count because of the economic disparities between urban and rural areas. Therefore, how cheaper the Kenya Power service will go is something all of us are very interested to know, but that can only be known if the plan is actually set in motion.
Anyway, let’s look at some facts at hand. First, Kenya Power is the only company that can say it has actual rural Kenya reach. Specifically, it has connected millions of rural homes to its grid in the last couple of years, which is no small feat, to say the least. Secondly, the company has worked or continues to work with internet providers by leasing fibre optic cables to them. To this end, it is possible to see why the fibre business angle can work for the power distributor.
However, can this development make other internet service providers move their business from urban to rural areas? My answer is yes, because, and let’s be honest, millions of people in rural Kenya have the capacity to afford fibre plans, but do not have a way of doing so because there is no broadband provider to offer them. In the same breath, tackling the rural market would also see more players do the same thing, which translates to better services, and at a much lower cost.
Internet service providers have not been spending a lot of money setting up new infrastructure for their fibre business because Kenya Power has been more than happy to lease transmission networks to them. It has done this with Safaricom (from 2010 on a two-decade agreement that cost near USD 4 million), as well as Wananchi Group and Jamiii Telecoms, each on a five-year lease.
It does not mean that Safaricom has not invested in terrestrial networks, which, as said, cost a lot of money to develop. Other than the leading telco, Telkom Kenya and Kenya Data Networks have also spent millions in growing their terrestrial networks.
At the moment, Kenya Power has more than 8 million customers, which is an excellent number if you look at it as a potential customer base for fibre services.
Safaricom’s mobile data is the most used product of its caliber in the country. The corporation has millions of subscribers, and following extensive investment in the space, Safaricom has been able to push LTE coverage to 96 percent. 3G and 2G population coverage now stand at 96% and 97% respectively.
Lastly, in terms of fixed data market share, Safaricom sits at the top with 269K subscriptions, making it a 36.7 percent market share.
Wananchi Group and JTL come second and third at 29.6% and 18.8%, respectively.