As he formed his administration in early 2003, Mwai Kibaki addressed the interests of advocacy groups that had been pushing for the full implementation of a policy for Kenya’s Information and Communication Technology (ICT) sector.
That the implementation of the ICT Policy was underway was signalled by the creation of a Ministry for Information and Technology, with Mutahi Kagwe as minister and Bitange Ndemo as Permanent Secretary.
The advocacy groups had in their ranks the pioneers of the ICT sector in Kenya, such as Ayisi Makatiani and Amolo Ng’weno, founders of Africa Online, and Shem Ochuodho, who was instrumental in paving the way for Kenya’s internet connectivity in 1995.
The Kenya ICT Action Network (KICTANET) was of the view that until ICT was decoupled from the Transport Ministry, there would be little progress in Kenya’s information sector.
The objective behind the lobbying for an ICT policy was to enable access to spectrum by the private sector to help establish independent Internet Service Providers (ISPs).
The creation of the ICT ministry was to operationalise the Act that had liberalised the sector following the break-up of Kenya Posts and Telecommunications Corporation (KPTC).
“The operationalisation of the Act was very slow because there were people who believed that telecoms must be run by the State because of the perceived security risk of letting private sector to control the sector. The Act was meant to liberalise the sector but there was that lacuna that telecom was a state security operation,” Prof Ndemo recalled many years later.
Among the barriers was a provision that telecommunications companies must be 70 per cent owned by the Government, which spooked investors.
There was another issue preventing investment in the sector: “Telkom was run by a mafia,” said Prof Ndemo. “Some employees had set up parallel telecommunications for terminating international calls. I think they used to get up to KSh4 billion, and Telkom was bleeding at the time.”
The need for change at Telkom ultimately led to Safaricom being hived off from it and mobile services could now be privatised. Telkom remained the sole controller of international gateways, but there were complaints that spectrum needed to be freed up for the private sector to run ISPs.
At Safaricom, Michael Joseph was insistent that Safaricom needed to have its own international gateway since using Telkom Kenya was not working well.
Prof Ndemo’s attempts to take the gateway from Telkom Kenya and give it to Kencell and Safaricom would nearly cost him his life.
“As I was leaving my house one morning, three gunmen almost shot me down. We found them on the road, and I told the driver to speed through whatever the consequences,” Prof Ndemo recalled.
Eventually, with President Kibaki keenly pushing the matter, the gateways were given to Kencell and Safaricom.
Still, it remained quite expensive to make calls abroad: at up to KSh45 per minute – down from the previous KSh60 – it was out of reach for many people.
“That’s how we started to find cheaper means of broadband. At the time, almost the whole of Africa was using one gigabyte of capacity, which came through Intelsat,” Prof Ndemo recalled.
Intelsat was a satellite company owned by several African countries – Kenya among them – with the satellites operated at Kericho, the Longonot Earth Station, and Nairobi.
Kenya was instrumental in the development of the East Africa Submarine Systems (EASSY), a project to connect several countries on the East African coast to Europe and the rest of the world via a fibre optic cable via Sudan and Egypt.
EASSY was to be financed by the World Bank, but the lender appeared to doubt the capacity of the interested countries to consume the faster internet they were bidding for.
Only South Africa had access to a fibre optic cable, which had been laid on the western side of the continent and connected to Europe.
Whenever they went for the meetings to discuss the EASSY project, Prof Ndemo and Mutahi Kagwe, his boss, came back unhappy.
“Every time we went for meetings, people didn’t know what it was going to do. They would say, ‘can we meet in Jo’Burg next; let’s meet in Cape Town; let’s meet in Harare’ and it was meeting after meeting,” Prof Ndemo recalled. One of the prerequisites for setting up EASSY was enacting sector regulations before the cable could land.
The two top men at the ICT ministry decided they would propose for Kenya to strike out on its own and get its own fibre optic cable.
“The minister arranged for a briefing meeting with President Kibaki. He said, ‘I don’t understand what you are saying but I support you,’” Prof Ndemo recalled.
The idea was to partner with another country and bring broadband capacity to this part of the world. When they went to the United Arab Emirates to discuss the idea with the leaders there, they were not taken seriously, and the capacity to utilise the broadband capacity was again raised.
To back their resolve, the minister and the PS informed the leadership of the UAE that Kenya would shoulder the cost of the fibre optic cable. Buoyed by this, and the fact that Kagwe and Prof Ndemo had an official letter from President Kibaki, the UAE leaders decided they would take up 15 per cent of the investment. The duo came back to Kenya to look for interested parties to take up the rest of the $100 million needed for the cable.
The World Bank remained sceptical throughout, insisting that it could only fund something that was going to be used, and there was no capacity for the 3.6 terabytes that the fibre optic promised. “When the World Bank looked at it, they said the project would be a white elephant,” Prof Ndemo recalled.
The ministry turned to the private sector, and the response was encouraging.
At Jamii Telecom, Dr Joshua Chepkwony was a reseller of satellite services in the region and therefore knew how painfully expensive the connection was, with a megabyte, 1MB, going for up to $5,000.
“We were paying between $11 million and $15 million [for the satellite services]. This is what we were reselling, but the percentage of our margins remained quite tiny,” Dr Chepkwony recalled.
When the ministry officials approached him to invest in TEAMS, it was a no-brainer.
“We had discussions as licensee operators in the country. Safaricom played an instrumental role in the formation of the consortium. Likewise, Jamii, as part of the founding members of the consortium, played a critical role in ensuring that we came together as an industry and perfecting the documentation,” Dr Chepkwony recalled.
At Safaricom, Investment Secretary Esther Koimett, who was on the board at the time, kept the company’s hierarchy alive to the conversations taking place in Government, but there was still a fair amount of scepticism as to whether it was a viable project or not.
The ministry had moved fast and incorporated TEAMS as a company so that whoever opted in would find a vehicle ready for investment.
As the conversations within Government continued, Joseph had a meeting in State House and came out convinced that the project had President Kibaki’s complete backing.
To assure Safaricom that this was indeed a viable project, Nzioka was dispatched to the UAE as a member of a high-level delegation: he was tasked with documenting what happened during their sojourn there.
The delegation went to Fujairah, where they saw that the landing facilities were in place. They were further assured that the cable had already been manufactured and was on the ship, ready to be laid on the seabed.
“We boarded a boat and went 10 kilometres out to sea where we boarded a cable-laying marine ship where we were shown an Alcatel Lucent cable branded ‘The East African Marine Cable Systems’. These were huge rolls of cable in the belly of the ship. They said to us: ‘Look at all this. Do you think we made this cable for fun? These are millions of dollars, and we are waiting for the green light to start laying the cable,’” Nzioka recalled.
At the landing station, they were shown the cables going to other parts of the world – Iran, across the Gulf of Oman, Asia. They also saw a slot written ‘The East African Marine Cable System’ where Kenya’s cable was going to be rolled out from.
Back home, it was time to get down to work. With the company formed, the money in an escrow account at Standard Chartered Bank, and the private investors reassured, Kenya funded the survey to establish where the cable would be laid, and the work was soon underway.
The cable would eventually land on the shores of Kenya in June 2009, and trigger the digital revolution that Safaricom had started when it got into 3G.
