State to waive license fees on local Internet

ICT Cabinet Secretary Joe Mucheru during Telkom Kenya and Loon Technology launch.[Standard]

The government will waive licence fees for firms that set up community networks in underserved areas of the country to accelerate Internet connectivity. 

This is according to a draft policy by the Communications Authority of Kenya (CA), that seeks to create a new licence category for community networks and develop financial and administrative requirements proportional to their scope and scale.

“In reaching the unconnected segments of the population, many in remote or sparsely populated, low-income areas, there is recognition by the authority that a variety of complementary strategies are needed to meet the needs for affordable communications infrastructure,” says the CA. 

According to the draft, the rate of broadband connectivity is slowing down across the country, despite several firms deploying thousands of fibre optic cables in the past decade.

“In order to address rapidly rising demand, the authority is considering methods beyond the traditional model of commercial operator licensing and exclusive spectrum assignments,” the policy says. 

According to the CA, 48 per cent of Kenyans, especially those living in rural areas, remain unconnected to mobile networks and an even larger number have no access to fixed broadband.

As at last year, there were only four community networks in Kenya running pilot projects. These were TunapandaNET in Cobra, Nairobi, Lanet Umoja in Nakuru, Dunia Moja in Kilifi and Aheri in Nyanza, all sponsored by non-governmental organisations.

The networks utilise WiFi technology, leading to challenges of network congestion and signal interference.

High spectrum fees and regulatory demands on annual reporting further make it difficult for community networks without steady revenue streams.

A 15-year licence, for example, will cost a Tier-3 operator Sh200,000 initial operating fee, Sh5,000 licence application fee and annual operating fee of 0.4 per cent of annual gross turnover or Sh160,000, whichever is higher. 

Operators are also required to produce an annual compliance report and meet several other conditions, both to qualify and maintain the licence. Other barriers include the high cost of equipment linked to high import duty and custom fees on telecommunications equipment and user devices. 

Under the new proposal, operators deploying within a sub-county will only pay Sh1,000 in licence application fees, Sh5,000 in initial operating licence fees and Sh5,000 in annual operating fees for a 10-year licence. 

At the same time, fibre-optic network operators will be required to publish a standard price list that is transparent and non-discriminative for wholesale rates that will be charged to community network providers. 

CA also hopes the policy will help create impetus for prospective service providers to make commercial use of television white spaces, the spectrum freed up by the country’s migration from analogue to digital broadcasting. 

The authority says it will set up a regulatory sandbox where spectrum fees will be waived for service providers that will be invited to test technologies that can use TV white spaces. 

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