Telkom’s fibre optic contract could end

Workers lay fibre optic cables om Mara Road in Upper Hill Nairobi on January 5, 2009. Telkom Kenya’s contract to manage the State-owned inland fibre optic network hangs in the balance after an audit noted that the project was mismanaged and could not sustain itself. PHOTO | FILE 

In Summary

• Further, the Mr Ouko called for a dedicated office to manage the fibre project. The ICT ministry responded by saying it would consider terminating its contract with Telkom Kenya or review it to make it robust.
• “We have always maintained all our service level agreements, in line with the Nofbi operations and maintenance contract we have with the government,” Mr Lobry said.
• This year, Mr Ouko revealed that taxpayers paid Sh2 billion as advance fees to contractors, management fee, commitment cost, operations and maintenance to Telkom Kenya for Nofbi.
• Auditor-General Edward Ouko noted that the project had not attracted sufficient revenues to sustain itself since the completion of Phase 1 because of mismanagement.

Telkom Kenya’s contract to manage the State-owned inland fibre optic network hangs in the balance after an audit noted that the project was mismanaged and could not sustain itself.

In a statement, the ICT ministry said that it might terminate the Sh250 million annual contract and scout for new managers.

Telkom Kenya was given the right to run the National Optic Fibre Backbone Infrastructure (Nofbi) for the government and sell capacity to telcos such as Safaricom, AccessKenya, Jamii Telecoms and Wananchi Group in 2011.

However, Telkom Kenya chief executive officer Vincent Lobry Thursday told Nation that, “the contract is up for renewal in March 2016.”

Auditor-General Edward Ouko noted that the project had not attracted sufficient revenues to sustain itself since the completion of Phase 1 because of mismanagement.

By last year, over Sh12.5 billion had been used to finance the project.

“The ministry has not been able to improve universal access to information, Nofbi has provided reasonable dark and lit fibre charges to internet service providers, but the benefits are yet to be transferred to end users,” said the auditor-general’s report.

TERMINATE CONTRACT

Further, the Mr Ouko called for a dedicated office to manage the fibre project. The ICT ministry responded by saying it would consider terminating its contract with Telkom Kenya or review it to make it robust.

In April 2014, the government declared its intention to terminate the contract but refused to divulge the reasons.

Telkom Kenya said it has honoured the agreement.

“We have always maintained all our service level agreements, in line with the Nofbi operations and maintenance contract we have with the government,” Mr Lobry said.

Industry players familiar with the matter said the move was prompted by news that France Telecom, which owns 70 per cent of the firm, intended to pull out of Kenya and other African countries — raising the spectre of Telkom Kenya transferring rights of managing the cable to a third party.

This year, Mr Ouko revealed that taxpayers paid Sh2 billion as advance fees to contractors, management fee, commitment cost, operations and maintenance to Telkom Kenya for Nofbi.

Despite the billions spent on the project, the cost of internet in Kenya remained higher than the UN target for developing countries.

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