Kenya Power turns to internet link-ups [Nation (Kenya)]
(Nation (Kenya) Via Acquire Media NewsEdge) Kenya Power plans to connect its customers to high speed internet by linking them to fibre-optic cable. The electricity supplier's acting managing director, Ben Chumo, said the firm would aggressively expand its cable in the next five years to tap into the growing demand for data from its retail customers and a growing list of corporate clients. "We are now focused on leasing out fibre-optic capacity to diversify and increase revenues," said Mr Chumo on Friday last week.The power distributor is planning to expand its fibre-optic network across the country as it seeks to reach out to its more than two million customers to boost growth and as it continues to finance network improvement and transmission to reduce power outages. The firm earned Sh1 billion from leasing out extra fibre bandwidth in the past financial year, with on-going connections expected to shore up the firm's revenues.According to the firm's chief manager for information technology and telecommunications, Mr Samuel Ndirangu, it would leverage on the existing power transmission lines to roll out massive fibre-optic connections.Currently, the power distributor has signed up Safaricom, Jamii Telcoms, Kenya Data Networks, and Wananchi as its clients and is expected to net new ones, including Airtel and KenGen."We have signed agreements with Airtel and we are now testing the system. They will soon be coming on board," said Mr Ndirangu.Sign up Ugandan firmThe firm is also in talks to sign up a company from Uganda, signalling growing opportunities regionally."Negotiations with the government to enable us to connect the counties are on-going," said Mr Ndirangu in an interview. Currently, the power firm has 1,800 kilometres of fibre network. The firm is targeting to roll out about 25,000 kilometres of the grid to reach households connected to power across the country. Last year, it laid only 200 kilometres of fibre but has received contracts to lay 400 kilometres this financial year. Kenya Power added 289,617 new customers to the power grid in the financial year that ended June 2013 to bring the total number of clients to 2.3 million.
The number has doubled in the past five years, but is expected to grow much faster in the next five years with the firm's plans to spend Sh156 billion in enhancing network efficiency and increasing power distribution. The original goal of laying the fibre was for its own use and to cut the high costs of having to be connected to the internet provided by other companies.
But, given an existing power transmission line, Kenya Power decided to start laying its own fibre-optic cables that is now set to be a major driver of its revenues in the future. "For us to be able to reach two million homes, we cannot do it by leasing capacity from the service providers as it would be very expensive. What we need to do is to expand our own capacity to offer services to our own customers and also lease to other service providers," said Mr Ndirangu. Data connectivity is increasingly becoming a huge area for growth for internet service providers and telecommunication firms, with telcom firms spending billions of shillings in laying fibre cable networks in the country. "If you are able to offer the service to say 250,000 customers and charge Sh1,000 a month, this will be Sh250 million. If we were to reach two million homes and charge only Sh500 per house, this would be Sh12 billion a year. So, that is where the potential is," said Mr Ndirangu.
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