Kenya’s cable plan to boost communications
American firm Tyco won a contract to undertake a marine survey that should be ready in two months at a cost of US2,7m.
The government will invite bids for a financial arranger who will design a plan to raise money for the project, expected to be complete by early next year. The contract will be awarded by April.
The government, through Telkom Kenya, is working with Dubai-based telecoms company Etisalat to built the cable.
The private sector will be invited to either buy shares or to prove its capacity to raise funds through plans worked out by the financial arranger.
Information and Communication minister Mutahi Kagwe said that fast-tracking the East African Marine System will ensure that Kenya does not lag behind in information and communication technology.
“The east African coast is the only one without a fibreoptic cable. We are racing against time,” he said.
The effect of the project, he said, would be enormous. It would turn the country into an outsourcing hub as a result of improved communication, which in turn would open up more jobs.
The cost of data transmission would come down, leading to lower cost of communication. The price of a Mbps is expected to plunge from a high of $7000 to $200.
Meanwhile, Kenya’s telecommunications sector urged the government this week to review the demand that any telecoms firm must be 30% Kenyan owned to get a licence, saying change was needed to boost competition and cut business costs, reports Business Report, Johannesburg.
The tendering rule has helped lead to the cancellation of two new licences in the country, where analysts say the liberalisation of telecoms has been too slow and limited.
Experts say the tendering process does not give foreign firms time to check the credit-worthiness of local investors.
Industry players fear the 30% rule could undermine the industry, which with the transport sector accounts for about 11% of Kenya’s gross domestic product.
Local firms complain that services from state-run Telkom Kenya are expensive and unreliable. More than 65000 people are waiting for fixed lines. Internet services are seen as poor, while the lack of competition keeps cellphone prices high.
The East African, Nairobi, reports that the Kenyan government will set up an independent vetting unit in the treasury to harmonise the issuing of business licences to attract investment.
Making the pledge this week, President Mwai Kibaki said the business regulatory reform unit would ensure procedures were investor friendly. He said the goal was to make Kenya a destination of choice for investors.
The unit would vet new licences that line ministries may wish to put in place to harmonise them with the private sector development policy.
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