Friday, February 23, 2018

Profile of the telecommunications market in Kenya – part 6

See part 1part 2part 3part 4part 5, part 6\

SECTION 5 National level networks

Kenyan National Optical Fibre Programme

The National Optic Fibre Backbone (NOFBI) is a project aimed at ensuring connectivity in all the 47 counties of Kenya both to ease communication across counties as well as improve government service delivery to the citizens such as the applications for national identity cards, passports and the registration of birth and death certificates.  The project is being implemented in 2 phases: NOFBI Phase 1 which started in 2007 and involved laying 4,300 km of cable and NOFBI Phase 2 which kicked in in 2014 and was designed to add a further 2,100 km of cable. The programme is being driven by the Government of Kenya with funding from the Chinese government, construction by Huawei, operation and maintenance by partially government-owned Telkom Kenya and oversight by the Ministry of ICT.

Other Kenyan optical fibre backbone projects

In mid-September 2015 it was announced that as part of the Eastern Africa Regional Transport, Trade and Development Facilitation Project the World Bank had released KSh 54 billion of funding to support the building over the next 2-3 years of major communication links between Kenya and the South Sudan including mainly  a $500 million superhighway between Lokichar in Turkana County in Kenya ("about 200 miles from the Sudan border )and the South Sudan borderpost of Nedapal  together with a fibre optic link which would cost KSh3.9 billion of which the Kenyan section would cost KSh2.4 billion. About 25% of South Sudan imports come from Kenya.

KENET The Kenyan Educational Network

KENET provides broadband internet services, by connecting member institutions to national and global internet It has PoPs in Nairobi(at the University of Nairobi and the United States International University) as well as Meru, Kisumu, Eldoret, Nakuru and Mombasa. KENET have access to a 10Gb/s Internet connection that is dedicated to education and research. Researchers and educators can transfer larger data sets per day between campuses in support of their research, as well as access grid computing infrastructures and high-performance computers. Students and staff have access to commodity Internet (educational videos, Wikipedia, YouTube, Facebook, coursera, etc) through dedicated commodity connections, supported by peering arrangements and caches for major content providers.

As of September 2017, KENET was providing Internet services to 220 campuses in different parts of Kenya. By September 1, 2017, KENET was generating over 13 Gb/s Internet traffic, about 60% being Google traffic (Google PoP in Mombasa and Google cache) and 6% Akamai traffic. KENET had a national distribution capacity of over 27 Gb/s consisting of leased lines and KENET dark fiber with 83 universities on a 1 Gb/s port to the KENET backbone network. KENET also peers directly with GEANT and London Internet Exchange in London through UbuntuNet Alliance, and is now connected to Africa Connect providing direct connections to African NRENs (e.g., RENU in Uganda, ZAMREN in Zambia and TENET in South Africa).

SECTION 6 - Specific end markets

Money transfer market

In mid July 2017, the Kenyan Wall Street reported that Visa was taking on both MPESA and Pesalink by announcing a partnership with nine Kenyan banks namely Barclays Bank; Cooperative Bank; Ecobank; Family Bank; KCB Bank: NIC Bank; Prime Bank; National Bank of Kenya; and Standard Chartered Bank; to offer free money transfer using Visa’s mVisa system hosted on its Visanet network. The report added that mVisa would now also be accepted at a number of merchant locations across the country through Direct Pay Online and Jambo Pay and noted that the countries in which mVisa was engaged Included live systems in Kenya, India, Rwanda and Egypt with plans to launch in Nigeria, Uganda, Tanzania, Ghana, Indonesia, Kazakhstan, Pakistan and Vietnam underway.

e-commerce and mobile payments market

Kenya’s e-commerce sector is currently dominated by brands such as Jumia, Kilimall, OLX, Pigiame, among others. In November 2017, Safaricom announced that it planned to enter this market with its Masoko(=“markets” in Kiswahili) product which would start with 200 vendors and about 30,000 consumer goods ranging from electronics to food and would provide a platform for merchants to trade goods on social media sites. Independent observers expected Safaricom to face stiff competition from market leader Jumia which four year after its launch now supports 5,000 vendors and about 500,000 products listed on its e-commerce.

SECTION 7 - Major Kenyan communications systems vendors 


Huawei appears well embedded in Kenya across a broad range of products and, services including as noted above being responsible for constructing a national fibre network linking all 47 Kenyan counties. With an estimated, 5,000 staff in Africa and operations in 40 countries including R&D groups in Angola, Egypt, Nigeria and South Africa Huawei has adequate economies of scale in the continent where based on its global sales one might expect it to be doing up to $2 billion of business

In August 2010, it was reported by Business Daily Africa that Safaricom had signed a three-year contract with Huawei for the supply of its core network requirements, and roll out of a 4G network at a cost of KSh12 billion ($143 million).

In July 2012, Business Daily Africa reported that Huawei had secured an exclusive tender to build a KSh6 billion national fibre optic infrastructure and e-government projects expected to start in August which would link Nairobi with 36 other towns through a Wide Area Network (WAN).

In November 2016, Safaricom and Huawei announced that they were celebrating 14 years of partnership which had included the modernisation of Safaricom’s network infrastructure for both 2G and 3G as well as key involvement in Safaricom’s Transmission, core network and CBS billing system as well as in the implementation of M-PESA the revolutionary money transfer system owned by Safaricom’s parent company Vodafone.More recently the companies had partnered for the rollout of 4G LTE and the national police surveillance system. In the report, Huawei claimed its mobile phone share in Kenya was around 10% at that time but it was targeting a 20% share using a range of phones. Including ultra low-cost phones selling at KSh5,000 In August 2017, Safaricom and Huawei announced that in order to accelerate the introduction of FTTH in Kenya Safaricom would adopt Huawei's end-to-end (E2E) FTTH solution.

Safaricom's plan is to utilize existing metropolitan area network (MAN) optical cables and preferentially use aerial cables. The architecture also looks to integrated the fixed broadband optical distribution networks (ODNs) with Safaricom's mobile backhaul networks. This enables Safaricom to deploy mini optical line terminals (OLTs) and wireless base stations in the same cabinet, realizing fast deployment and decreasing network construction costs.

In summary, although Kenya is now beset by a very difficult political/tribal conflict, the nation's overall telecommunications market has been improved significantly over the past decade and is positioned to continue forward progress in delivering better digital services to all corners of the land.


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