Kenya Power declares home internet here within a year
Kenya Power will start offering fixed internet services by June next year in a move that will put it in competition with telecom operators and spark new price wars in the battle for the market.
The power utility has piloted the provision of fixed internet to a number of its enterprise customers over the past few months, setting the stage for the rollout of the new line of business as part of revenue diversification.
Kenya Power’s acting chief executive, Geoffrey Muli, said the power utility would launch the service before the end of the current financial year, battling market leader Safaricom, Wananchi-owned Zuku and d other Internet Service Providers (ISP).
Entry into the fixed Internet market will be a step up from the current model where the electric utility leases fiber optic cables to ISPs that connect to its transmission lines.
“Our plan is to launch our Lit Fiber business this fiscal year,” Muli said yesterday at the inaugural exhibition forum bringing together Kenya Power, manufacturers and technology companies.
Kenya Power will leverage its vast network of over 7,000 kilometers of fiber optic cables which are connected to its power transmission line offering dark fiber services to ISPs in the country and region.
Safaricom is the dominant player in the fixed internet market with a 37% share, followed by Wananchi at 29.2% in September last year, according to data from the Communications Authority of Kenya (CA ).
Demand for internet services has increased over the past two years following the outbreak of the Covid-19 pandemic which has fueled remote working and e-learning in a bid to curb the spread of the disease.
The AC says the fixed internet market is largely untapped, providing telecom companies and Kenya Power with an opportunity to increase revenue.
In 2010, Kenya Power signed a 20-year lease contract worth 421 million shillings with Safaricom for the use of a pair of fiber cables.
It has also signed deals with telecommunications companies Wananchi Group and Jamii Telecoms, each signing five-year leases worth a total of 403 million shillings.
Entry into the fixed internet market will shake up ISPs that have used Kenya Power’s network to sell data, giving the power utility a leg up in the race in rural Kenya.
Kenya Power believes that revenue from the sale of data to its corporate customers will diversify its revenue and help it meet the challenges facing the power division.
The change comes at a time when Kenya Power is grappling with reductions in electricity tariffs which will affect utility revenues.
The government slashed electricity tariffs by 15% in January in a bid to reduce the burden of electricity bills for households and businesses, a cut that is expected to leave a 26 billion shilling hole in the books of the company.
Kenya Power recorded a net income of 3.8 billion shillings in the six months to December last, up from 138 million shillings a year earlier. But the full year performance for the period ended last month will be affected by the 15% tariff reduction.