Telcos set for big boost in Sh1.5bn rural tenders

Corporate News

USAC chairperson Catherine Ngahu during the release of the results of the ICT access gaps study in Nairobi on January 21, 2016. PHOTO | SALATON NJAU 

By OKUTTAH MARK, mokuttah@ke.nationmedia.com

In Summary

• The Universal Service Advisory Council (USAC) will embark on advertising tenders for infrastructure projects worth Sh1 billion starting September this year.
• The projects will include voice and broadband coverage in identified access gap areas.
• The areas in which the projects will be implemented will be selected after the finalisation of ICT Access Gap study being conducted by Intelecon Research and Consultancy.

The government is set to advertise for ICT project tenders worth Sh1.5 billion to supply equipment and connect remote and under-served areas of the country.

The cash will be drawn from the Sh2.94 billion Universal Service Fund (USF) that mobile operators, broadcasters, Internet service providers (ISPs) and postal and courier service providers have so far contributed to the fund.

The USF levy became effective in July 2013 and is managed by the Universal Service Advisory Council (USAC).

Telecoms operators pay an equivalent of 0.5 per cent of their annual turnover, with the Communications Authority of Kenya (CA) contributing 25 per cent of its surplus revenue to the fund.

Catherine Ngahu, the USAC chairperson, said Thursday the council will embark on advertising tenders for infrastructure projects worth Sh1 billion starting September this year.

The projects will include voice and broadband coverage in identified access gap areas. In addition, the fund will also support Internet connectivity in learning institutions in the country to the tune of Sh500 million.

The areas in which the projects will be implemented will be selected after the finalisation of ICT Access Gap study being conducted by Intelecon Research and Consultancy.

“This study will go a long way in unlocking the utilisation of the Sh2.94 billion collected so far in addition to providing the much-needed direction for the sector especially in deployment of broadband infrastructure,” said Dr Ngahu.

“Going forward, the fund will be advertising and calling for proposals for projects to be implemented in every financial year. This will be done through the normal tendering process, which will be evaluated and awarded to lowest qualified bidders.”

Christopher Kimei , the director of licensing compliance and standards at the CA, said the  draft USF regulations have incorporated a penalty of 0.2 per cent of the gross turnover on all licensees who fail to meet their respective USF obligations.

An access gap study conducted in  2011  found 1,119 sub-locations and 4.48 million people without access to mobile voice services while 6,256 sub-locations and 72 per cent of population were without access to data (3G).

The preliminary of results the Intelecon Research and Consultancy study released Thursday showed the gaps have reduced. 

“Our target is to attain connectivity speeds of 40 Mbps and 5 Mbps by next year for urban and rural areas respectively,” said Mr Kimei.

The results showed that the 94.4 per cent of the country’s population is covered by 2G, 166 sub-locations have zero coverage while 418 sub-locations have less than 50 per cent population coverage.