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 2^nd  August shared the restricted tender document with the three NFP Tier 1 licensees with tender closing date being 5^th October 2016.

The Authority held Pre-bidders conference on the 18^th August 2016 attended by all the NFP Tier 1 operators. Tender evaluations commenced immediately after the closing on 5^th 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 19^th 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