Kenya: State forced to let Telkom manage the national fiber optic network for lack of money to ensure it
May 31st 2021
The financial management of phase 1 of the national fiber optic network continues to raise concerns in Kenya. If the telecoms infrastructure remains in Telkom’s hands, without clear directions, the Kenyan government could lose more money over time.
Katherine Getao, Chief Executive Officer of the Kenya Information and Communication Technology Authority (ICTA), revealed the reasons why mobile operator Telkom Kenya remains the manager of the phase so far. 1 of the national fiber optic infrastructure (NOFBI 1), although its contract expired in 2016.
Sunday, May 25, during a meeting attended by Jerome Ochieng, the principal secretary for ICT, Katherine Getao explained to the Public Accounts Committee (PAC) of the National Assembly that the situation stems from a lack of means government funding to maintain the telecoms infrastructure itself.
“ We are currently collecting royalties from telecom operators who use NOFBI 2, but we have not been able to secure a management contract for phase 1 which is operated by Telkom Kenya. We need money to take over and operate NOFBI 1, ”said Katherine Getao, who points out that the government does not pay for the use of the infrastructure. She indicated that the ICTA can take over management from Telkom if the maintenance funds come from the full commercialization of the capacities or if the Public Treasury allocates a budget for this purpose.
Katherine Getao’s statements follow concerns raised by Nancy Gathungu, the Auditor General of Kenya, in February 2021. In her latest report to the Ministry of ICT, Innovation and Youth, she once denounced moreover, the opacity around the management of the NOFBI 1, deployed in 2005 to interconnect the 47 counties of the country and provide the populations with access to broadband, in addition to supporting the digitization of society. Telkom had been selected for its management and maintenance against a monthly payment of 20.3 million shillings (approximately 190,000 USD).
If the management of NOFBI 1 remains in Telkom’s hands and the company continues not to pay the related royalties to the Treasury, Kenya runs the risk of not recouping its investment costs. The country had taken out a loan of more than 25 million USD from Exim Bank of China. The money was to be repaid with the income from the marketing of the excess capacity.
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