Dear listers, Happy New Year to you all! Following some enquiries, I thought it would be helpful to share an update of the operationalization of the Universal Service Fund. All this information is available for public consumption. This gives an overview of the status of the country’s network connectivity and initiatives currently under implementation by Communications Authority of Kenya (CA) with respect to the Universal Service Fund (USF) projects. BACKGROUND The Kenya Information Communications Act 2009 (KICA 2009) and the Kenya Information and Communications Regulations 2010 (KICR US&A 2010) mandate the Communications Authority of Kenya (CA) to manage and administer the Universal Service Fund (USF). During the FY 2015/16, the Authority conducted an ICT Access Gaps study to identify ICT infrastructure and services gaps / high cost areas and estimate the appropriate financial subsidy amounts required from the Universal Service Fund (USF) to facilitate closing of the identified ICT gaps. The Authority in the FY 2015/16 undertook an ICT Access Gaps study to identify gaps / high cost areas and establish the subsidy amounts required from the Universal Service Fund (USF) to facilitate closing the voice and data services gaps. This study findings were released in mid 2016. KEY FINDINGS OF THE ACCESS GAPS STUDY 1.1 2 G Coverage The study established that 94.4% of Kenyan population is covered by 2G leaving out only 5.6% of Kenyan population that has no access to voice communications services. Only 164 out of a total of 7,149 sub-locations remain totally uncovered, while a further 418 have less than 50% of their populations covered by 2G. Table 1: Sub-location population 2G coverage Coverage 100%
90%
50% - 90% < 50% 0% Sub-locations 5,655 487 425 418 164 1.2 3G Broadband coverage 78% of the population in Kenya are covered by 3G. Table 2: Sub-location population 3G coverage Coverage 100%
90%
50% - 90% < 50% 0% Sub-locations 2,454 1,324 1,146 977 1,244 1.3 The Broadcasting Sector Kenya’s broadcasting market includes over 100 FM radio stations and around 40 digital Digital Terrestrial Television (DTT) sites. Digital Terrestrial Television sites rollout. The digital signal currently covers 60 per cent of the Kenyan population. The signal is available in; Nairobi, Nakuru, Nyeri, Mombasa, Kisumu,Webuye, Eldoret, Malindi, Meru (Nyambene), Kisii, Kericho, Narok, Nyahururu, Embu, Kisii, Machakos, Murang’a, Naivasha, Nyeri, Webuye, Narok, Mbuinzau, Kapenguria, Wajir, Kitui, Lamu and Namanga. 1.4 Post and Courier Sector There are 623 post offices distributed across all counties as captured in Table 3. Table 3: Country wide distribution of Post Offices Administrative Level Total At least one PO present Penetration of post offices Min Average Max[1] County 47 47 2 13 55 Constituency 295 264 0 2 14 Ward 1,450 480 0 33% 10 Sub-location 7,149 524 0 7% 7 1.5 Percentage 2G and 3G Network Coverage per County Table 4: Estimated 2G and 3G Network coverage by County County 2G (%) 3G (%) Baringo 87.7 49.1 Bomet 99.8 97.7 Bungoma 96.4 95.2 Busia 99.1 95.4 Elgeyo Marakwet 97.1 34.7 Embu 99.6 88.3 Garissa 58.1 4.6 Homa Bay 97.8 87.6 Isiolo 54.7 16.4 Kajiado 74.4 38.9 Kakamega 99.9 93.5 Kericho 99.6 87.7 Kiambu 99.8 98.3 Kilifi 91.9 51.5 Kirinyaga 100.0 98.5 Kisii 99.9 90.2 Kisumu 99.9 98.8 Kitui 89.2 49.8 Kwale 91.5 46.4 Laikipia 90.8 48.9 Lamu 82.4 34.4 Machakos 99.9 73.0 Makueni 99.6 68.7 Mandera 66.9 9.4 marsabit 56.6 25.2 Meru 99.8 85.4 Migori 99.1 69.5 Mombasa 99.7 99.8 Muranga 99.7 80.8 Nairobi 100.0 99.9 Nakuru 99.7 74.6 Nandi 99.6 85.9 Narok 86.7 29.9 Nyamira 99.9 96.2 Nyandarua 99.7 66.1 Nyeri 99.8 86.5 Samburu 55.5 14.0 Siaya 99.6 94.5 Taita-Taveta 96.4 43.4 Tana River 85.8 12.8 Tharaka Nithi 97.9 77.6 Trans Nzoia 99.9 81.1 Turkana 34.8 10.2 Uasin Gishu 99.8 76.2 Vihiga 99.9 99.0 Wajir 48.2 8.4 West pokot 69.0 13.3 2.0 UNIVERSAL SERVICE FUND INITIATIVES TO IMPROVE ON CONNECTIVITY 2.1 USF PRIORITY PROJECTS AND PROJECTS IMPLEMENTATION STATUS The ICTs Access Gaps study identified two priority projects namely; a) ICT Infrastructure projects to address Voice services: Voice services make a large contribution to closing the remaining gaps. This will reduce the population coverage gap from 5.6% of the population to around half (2.8%) by 2018. · The Voice gap project were to be tendered as multiple bidding lots at the sub-location or ward level. The NFP (Tier 1) operators were to be invited to bid for as many or few of the Lots as interests them. b) Education Broadband connectivity projects - Establish a first step towards addressing the critical national gap, which exists in connectivity of schools in Kenya. · The education broadband project was to be implemented through a framework of partnership with the Ministry of Education, Science and Technology. The tender for schools connectivity was to be implemented through competitive tendering process. · The above two USF priority projects shall be implemented under the accepted guidelines for USF, which stress on transparency and competitive bidding processes as per the procurement Laws in Kenya. 2.1.1 The Voice Service Projects and Implementation Status A total of 348 sub-locations were identified through the combined GIS and Access Gap Model methodology as the priority cases which best meet the critical performance criteria suited to “smart subsidies”, meaning that they will result in sustainable service provision in the gap areas. The total of sub-locations to be included in the USF competition reduces to 202 after consideration of operator licence obligations between 2016 and 2018. · Implementation Status /Achievements The Authority in August 2016 tendered for the Voice Infrastructure projects, which were structured into multiple bidding lots at the sub-location or ward level that yielded into 105 lots. Telecommunications Voice Infrastructure and Services Tender was a restricted Tender for Network Facility Providers (NFPs), Tier 1 operators licensed to provide GSM mobile services in Kenya. The Network Facility Providers (NFP, Tier 1) licensed operators were invited to bid for as many or few of the Lots as interests them. The Authority on 2nd August shared the restricted tender document with the three NFP Tier 1 licensees with tender closing date being 5th October 2016. The Authority held Pre-bidders conference on the 18th August 2016 attended by all the NFP Tier 1 operators. Tender evaluations commenced immediately after the closing on 5th October 2016. Analysis of the USF Voice Project Bids The Table below shows the numeric results of the competition, indicating geographical area, populations and subsidy budget lots bidded and the subsidy amount awarded per bidder. Table 5: Results of the USF Bid Competition Lots Sub-locations Geog Area 000’s Km2 Unserved population Subsidy Expected Budget Original Tender 105 202 45,304 697,971 Max. 2.362 Bn 1.600 Bn Bid 37 86 29,906 389,778 1.458 Bn Awards 34 78 24,291 319,318 Awards 1.245 Bn 1.245 Bn Percentage awarded 32.3% 38.6% 53. 6% 45.7% 52.7% 77.8% Additional Lots bid but subject to clarification and finally rejected 2 7 5,615 (12.4%) 70,460 (10.1%) 0.293 Bn N/A Way Forward Out of the 105 lots, 37 lots (86 sub-locations) were bided for and 34 (78 sub-locations) awarded for voice infrastructure development. Based on the awards, 38.6% of the targeted sub-locations will be reached, against the 60-70% projected in the Access Gap Report. The Authority intends to close the voice gaps in all sub-locations through a phased approached with the first batch of 78 sub-locations being contracted for infrastructure development in the current fiscal year. The Authority noted that Operators generally targeted large service areas with heavy subsidies for several new towers rather than smaller areas requiring more complex network optimisation. The Authority is also planning to offer spectrum waivers to encourage roll out to the areas considered unattractive by the Mobile Network Operators. Summary of results The following graph shows the results on a county-by-county basis indicating tendered versus awarded numbers of sub-locations. It will be noted that the most successful in terms of targeted sub-locations versus awards made were Marsabit, Kwale and Bungoma (100%), followed by Wajir (63%) and Narok (57%). 2.1.2 Education Broadband Connectivity Projects and Implementation Status The ICT Access Gaps study identified a national gap in access to broadband connectivity for the education sector. In implementing the schools connectivity project, the Authority has partnered with the Ministry of Education Science and Technology (MoEST) through a Memorandum of Understanding (MOU) to provide broadband connectivity to all secondary schools in Kenya. The first phase of the Education Broadband Connectivity project has been designed to provide 5Mbps dedicated Internet connectivity to 896 secondary schools identified by the Ministry of Education Science and Technology spread across all the 47 counties. The project targeted to connect up to 1,000 schools but MoEST provided only 896 secondary schools drawn from all the 47 counties in Kenya that met the Internet e-readiness criterion. Secondary schools designated as “Internet-ready: for the purposes of this project shall be those certified by MoEST as meeting the following criteria: i. Connected to the Grid / electricity; ii. A secured computer laboratory with working computers; iii. A qualified ICT / computer teacher; iv. Offering students the KCSE Computer studies curriculum and submission of students for KNEC examination at Form 4 in 2015 and/or 2016. Implementation Status / Achievements The Authority advertised the Tender for the Education Broadband Connectivity Project. This was an “Open Tender” to all licensees contributing to the USF levy. The tender was grouped into 9 lots and the tender closed on 19th October 2016”. The tender has been awarded to three (3) bidders at total cost Kshs. 837 Million. Based on the data from the Ministry of Education Science and Technology (MoEST) Kenya has about 7000 secondary school. The Authority is connecting 896 Secondary school to Broadband within the current financial year. Subsequently, the Universal Service Fund will be used to connect all the remaining secondary schools. STATUS OF 4G COVERAGE The Authority has issued LTE spectrum in the 800MHz on trial basis to the three (3) Mobile Network Operator i.e Safaricom Ltd in 2014, Airtel Ltd and Telkom Ltd in 2016. Safaricom Limited has so far rolled out the 4G network in the following five (5) major towns i.e Nairobi, Mombasa, Nakuru, Kisumu and Eldoret while the other two operators are preparing to commence their 4G network roll. Annex 1: Voice Infrastructure Project – Financial Year 2016/17 LOT COUNTY LOT NO. COUNTY WARD SUBLOCATION UNSERVED POP’N MAX. SUBSIDY (KSHS) B1 B2 202 697,971 2,362.011 1 BAR-3 BARINGO MUKUTAN MUKUTANI 1,284 7.940 15,720,000 BARINGO MUKUTAN ARABAL 1,471 2 BAR-6 BARINGO TIRIOKO NGORON 1,501 18.139 BARINGO TIRIOKO KULAL 3,021 3 BAR-7 BARINGO TIRIOKO LOKIS 2,445 15.720 BARINGO TIRIOKO NGAINA 2,516 WEST POKOT MASOOL CHEPSERUM 1,386 8 BUNG-1 BUNGOMA CHEPYUK KORN'GOTUNY 1,886 17.763 17,762,999 (13) 17,763,000 BUNGOMA CHEPYUK CHEPKURKUR 3,285 BUNGOMA CHEPYUK EMIA 1,452 BUNGOMA CHEPYUK KUBURA 3,890 BUNGOMA CHEPYUK CHEPYUK 5,467 BUNGOMA CHEPYUK KAIMUGUL 5,709 12 GAR-7 GARISSA GOREALE GOREALE 4,523 32.389 32,389,000 14 GAR-2 GARISSA SANGAILU HANDARO 5,102 24.120 24,119,999 18 IS-3 ISIOLO GARBATULLA MALKADAKA 3,632 24.860 24,859,999 (16) 24,860,000 19 IS-4 ISIOLO KINNA KULAMAWE 3,532 28.595 28,594,999 (4) 28,595,000 26 KAJ-7 KAJIADO KEEKONYOKIE KISAMIS 2,429 28.929 28,928,999 KAJIADO MOSIRO EMBARBAL 2,429 29 KAJ-10 KAJIADO MAGADI ENDOINYO-OLASHO 1,728 43.669 41,485,549 KAJIADO MAGADI OLOIKA 1,744 KAJIADO MAGADI PAKASE 3,377 KAJIADO MAGADI SHOMPOLE 2,085 30 KIL-2 KILIFI SOKOKE NDUGUMANI 1,123 7.169 7,168,999 KILIFI SOKOKE MWANGEA 1,215 KILIFI JILORE MKONDONI 1,572 33 KIT-3 KITUI ENDAU/MALALANI MALALANI 2,136 55.354 55,353,999 KITUI ENDAU/MALALANI MAKUKA 2,033 KITUI NUU MALAWA 4,352 KITUI KANZIKO ILAMBA 1,467 37 KIT-5 KITUI NGOMENI KIMELA 2,161 12.222 12,221,999 38 KW-1 KWALE PUMA BUSA 7,323 123.377 123,377,000 KWALE PUMA VIGURUNGANI 3,244 KWALE NDAVAYA MWANDIMU 8,925 KWALE MACKINON ROAD KILIBASI 1,139 KWALE MWERENI KASEMENI 3,060 KWALE MWERENI KILIMANGODO 10,848 41 MAN-1 MANDERA KOTULO EL RAMU 9,165 17.990 17,989,999 42 MAN-2 MANDERA KOTULO BORJI GARSE 3,525 15.212 15,211,999 MANDERA KOTULO KUTAYU 3,447 44 MAN-5 MANDERA WARANKARA WARANKARA 9,387 13.200 13,199,999 47 MAN-4 MANDERA TAKABA SOUTH WANGAI DAHAN 10,763 16.760 15,921,999 48 MARS-2 MARSABIT KARARE SCHEME 1,530 33.111 33,110,999 MARSABIT KARARE KARARE 2,576 MARSABIT KARARE SONGA 1,084 MARSABIT KARARE KITURUNI 1,230 MARSABIT SAGANTE/ JALDESA BADASA 1,204 49 MARS-3 MARSABIT DUKANA BALESA 4,661 48.554 48,553,999 MARSABIT DUKANA EL-HADI 3,051 50 MARS-1 MARSABIT LAISAMIS NDIKIR 1,814 65.669 65,669,000 MARSABIT KORR/NGURUNIT NGURUNIT 3,728 MARSABIT KORR/NGURUNIT LONYORI PICHAU 3,015 SAMBURU NDOTO ILLAU 1,017 SAMBURU NDOTO NGURUNIT 1,611 53 NAR-3 NAROK MAJI MOTO/ NAROOSURA MAJI-MOTO 1,251 9.145 9,144,999 54 NAR-4 NAROK MAJI MOTO/ NAROOSURA ELANGATA ENTERIT 3,831 25.722 25,721,999 NAROK MAJI MOTO/ NAROOSURA ENKUTOTO 4,568 57 NAR-7 NAROK LOITA OLNGARUA 1,499 69.787 69,786,999 NAROK LOITA OLORTE 3,114 NAROK LOITA MAUSA 3,575 NAROK LOITA ENTASEKERA 3,231 NAROK LOITA OLMESUTIE 2,031 62 SAM-4 SAMBURU NYIRO LONJORIN 2,164 22.229 22,228,999 SAMBURU NYIRO LKAYO 3,581 68 TKN-7 TURKANA KERIO DELTA NAKURIO 9,426 56.435 56,434,999 (9) 56,435,000 TURKANA KERIO DELTA NAKORET 5,155 70 TKN-11 TURKANA LOIMA PUCH 12,002 59.938 59,937,999 (14%Coverage) Rejected 72 TKN-12 TURKANA TURKWEL KAPUS 8,320 26.167 26,167,000 73 TKN-9 TURKANA KOTARUK/LOBEI NAIPA 4,207 19.160 19,160,000 TURKANA KOTARUK/LOBEI LOKIPETOT ARENGAN 4,861 75 TKN-19 TURKANA KIBISH KARACH 1 5,502 29.603 29,602,999 (26% Coverage) Rejected TURKANA KIBISH KAITEDE 6,333 76 TKN-13 TURKANA LETEA LOKIPOTO 18,956 18.451 18,450,999 (61% Coverage) Rejected 79 TKN-17 TURKANA LOPUR LOPUSIKI 3,947 104.377 104,376,999 TURKANA SONGOT LOKUDULE 3,216 TURKANA SONGOT LOKANGAE 11,599 81 TKN-2 TURKANA LOKORI/KOCHODIN KANGITIT 4,794 81.124 81,123,999 (67% coverage) Clarification TURKANA LOKORI/KOCHODIN LOTUBAE 22,129 TURKANA KAPEDO/NAPEITOM NGILUKIA 4,356 82 TKN-4 TURKANA KATILIA KATILIA 9,513 223.315 212,149,249 (60% coverage) Clarification TURKANA KATILIA PARKATI 11,455 TURKANA KALAPATA KALAPATA 10,869 TURKANA KALAPATA LOPEROT 7,344 84 TKN-1 TURKANA KAPEDO/NAPEITOM NADOME 3,653 24.684 24,683,999 85 TKN-6 TURKANA LOKICHAR NAPOSUMURU 6,034 25.6 25,600,000 87 WAJ-6 WAJIR BATALU BUNA 3,465 51.493 51,492,999 WAJIR BATALU KUROW 3,129 89 WAJ-2 WAJIR KHOROF/HARAR RIBA 11,042 50.496 47,971,199 91 WAJ-5 WAJIR ELBEN MANSA 12,247 87.429 87,428,999 WAJIR SARMAN DUNTO 10,733 92 WAJ-4 WAJIR ELDAS KILKILEY 4,107 47.673 47,672,999 WAJIR ELNUR/TULA TULA LAKOLE 9,066 98 WPOK-6 WEST POKOT CHEPARERIA SHALPOGH 4,248 5.841 5,841,000 99 WPOK-11 WEST POKOT ALALE APUKE 1,442 24.696 WEST POKOT KIWAWA LOPET 2,300 TOTAL 1,182,081,961 385,141,000 Annex 2: Counties and number of Internet-ready Schools to be connected in 2016/17 Lotting of the Counties and number of Internet-ready Schools Lot 1: Lot 2: Lot 3: Lot 4: Lot 5: Lot 6: Lot 7: Lot 8: Lot 9: County Sch County Sch County Sch County Sch County Sch County Sch County Sch County Sch County Sch Garissa 3 Mandera 7 Wajir 4 Samburu 3 Marsabit 4 Turkana 4 W. Pokot 7 Baringo 10 Narok 10 Tana River 2 Nairobi 39 Isiolo 4 Laikipia 11 Meru 19 Elegeo Marakwet 10 Trans-Nzoia 18 Kericho 21 Migori 11 Lamu 5 Murang'a 35 Tharaka Nithi 14 Nyandarua 5 Embu 24 Uasin Gishu 17 Bungoma 54 Kisumu 23 Homa Bay 15 Kilifi 13 Kajiado 8 Kitui 31 Nakuru 35 Nyeri 29 Kakamega 55 Busia 24 Vihiga 20 Siaya 24 Mombasa 12 Makueni 26 Kiambu 45 Kirinyaga 22 Nandi 28 Bomet 10 Kisii 24 Kwale 7 Taita. Taveta 14 Nyamira 20 Machakos 69 Sub-total 111 89 93 99 99 114 103 84 104 TOTAL NO. SCHOOLS 896 Regards, Rachel Alwala Assistant Director/Communications and External Affairs Communications Authority of Kenya PO Box 14448 Nairobi 00800 Tel: +254 703042000 Email: alwala@ca.go.ke