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KPLC leases out unused fibre optic network cables

By | February 3rd 2010

By George Obulutsa

Power distributor Kenya Power and Lighting has signed a $7.4 million (about Sh562 million) agreement with three local telecoms firms to lease its fibre optic network.

Seeking to diversify its business, KPLC is leasing out extra capacity on 36 unused fibres, after taking up bandwidth for its own internal communications and monitoring its power grid.

KPLC Managing Director, Joseph Njoroge, said KPLC had signed a 20-year lease agreement worth $3.8 million (about Sh288m) with leading mobile operator, Safaricom, for use of fibre cables.

Telecoms firms, Wananchi Group and Jamii Telecommunications, each signed five-year leases worth a total of $3.6 million (Sh273.6m).

Enormous potential

"KPLC is pursuing this line of business, because we see enormous potential to diversify our revenue base and enhance our bottom line," Njoroge told reporters.

Safaricom CEO, Michael Joseph, said his firm would start using the cable between Nairobi and Mombasa mid this month, the first stretch KPLC had commissioned for commercial use.

The three telecoms firms are also shareholders in the East African Marine Cable (TEAMS) submarine cable, which alongside another, SEACOM, has landed in Mombasa.

Once completed, KPLC’s cable will run to Tororo in Uganda, and to other towns locally, Njoroge said. The project started in 2006 and is seen costing about $25 million (about Sh1.9b). Telecoms industry players see fibre optic cable as way to save the costs associated with satellite connections, and avoid copper wire connections prone to vandalism.

But the industry has complained in recent months about fibre optic cables being damaged too, and KPLC’s cable is seen as an answer to vandalism, because it will run alongside power lines.

— Reuters

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