Ketraco eyes Sh500m annual revenue from fibre optic deal with Liquid Telecom

Kenya Electricity Transmission Company (Ketraco) expects to earn Sh500 million per year from the partnership with Liquid Telecom that will see the latter extend fibre optic services to new areas.

In the 15-year deal reached at on Thursday, Liquid Telecom will use Ketraco’s optical pilot ground wire to increase fibre internet to areas already connected to the grid and also extend connections to remote areas of Kenya and neighbouring countries.

Liquid Telecom Kenya CEO Adil Youssefi said that the firm will invest $7 million (Sh700 million) into the project that will see it take 40 per cent of the revenue generated per year while 60 per cent goes to Ketraco.

“Our part is to bring equipment to commercialize the services. We want to connect the existing 2000 kilometers of Ketraco fibre to our over 1,000 plus fibre network to deliver reliable internet,” said, Mr Youssefi.

The latest partnership will introduce multiple routes to new areas, lowering downtimes and overheads for businesses given that Ketraco fibre is on high voltage transmission lines.

Nairobi-Mombasa line

Nairobi- Mombasa line is expected to go live in the next one week as Liquid Telecom seeks to tap into the high demand on this route.

Ketraco CEO Fernandes Barasa said that he expects the deal to deliver Sh500 million per year for a start, with the revenue expected to more than double when all the 2,000 lines are utilised.

“We are starting with only 1,000 kilometres of the line and as we bring on more lines on board, the revenue will grow further. In the next one year, we expect to have doubled the number,” he said.

Ketraco has been implementing a broadband strategy that involves leasing extra fibre optic capacity, in a move meant to generate additional revenue for the State corporation.

15 years
In the year ended June 2018, it made Sh250 million from fibre optic business deal signed with Safaricom #ticker:SCOM and Jamii Telecom.

The deal with Liquid Telecom was initially meant to take 10 years but Mr Barasa said this has been extended to 15 years to accommodate the new lines that have been brought on board.

In 2014, the Communications Authority of Kenya granted Ketraco a network facility provider tier II licence, allowing the firm to lease out fibre to third parties.