Liquid Telecom spends Sh17bn on fibre expansion

Liquid Telecom, the data, voice and internet provider, has connected  39 counties with 4,200km of fibre optic network at a cost of $200 million (Sh17 billion) to tap growing internet access as government and private institutions expand their services to the grassroots. 

Demand for fibre internet infrastructure in the counties has been driven by organisations expanding to new territories, particularly banks opening rural branches – with 80% of them on the Liquid Telecom fibre network – linking ATMs as well as providing secure inter-office connections from rural branches to head office.  

The growing rural banking network has increased the uptake of banking services, which has grown from 13.5% in 2006 to 29.2% in 2013, according to the FinAccess National Survey.

Government ministries as well as parastatals setting up regional offices have stimulated a surge in communication needs, including access to core databases, approval of transactions, email and information sharing within ministries and sub-counties across many locations. Liquid Telecom has connected 25 parastatals with their branches across the country, including 25 centres for Kenya Agricultural Research Institute (KALRO), four centres for the Kenya Water Institute, Kenya Industrial Property Institute, Kenya Ports Authority, as well as all the tea estates under the Kenya Tea Development Authority.

Telephone operators providing 3G services are also driving the network expansion to the counties. 

“We believe that everyone has the right to be connected and so investing in the building of infrastructure to the counties will help us in our goal to connect every person and business in Africa,” said Ben Roberts CEO of Liquid Telecom Kenya. “Internet offers unprecedented opportunities for economic growth in developing countries. 

By providing access to information, connecting people to businesses, and opening up new markets, the internet can transform the very nature of an economy and support economic development.”

“For our clients, the main concern is a stable internet connection that enables them provide swift services to the public through accessing information on the national database, allowing regional staff to process requests and make real-time updates, and a fibre network is more reliable in these instances,” said Mr Roberts.

Extending internet access in developing economies can raise living standards and incomes by up to $600 per person a year, and could lift 160 million people out of extreme poverty, according to a report from Deloitte.  

For government, the cost savings through moving service delivery online drives further economic gains. In Kenya, the National Health Insurance Fund (NHIF) has, for instance, reduced its administrative costs from 60% to 32% by automating its claims processing to enable online pre-approval, enabling real-time access of data, and tracking of payment processes. The connection of counties is expected to further lower these administration costs.

Liquid Telecom’s investment in the fibre network is driven by its quest to deliver a positive economic impact through increasing internet connectivity.  

“It is imperative to create an internet infrastructure that will enable counties to access institutional intranet facilities, parastatals to provide services to the people, and business people to flourish. Internet is a key requirement for this to happen,” said Mr Roberts.

 

His sentiments are supported by reports that a 10% increase in broadband use leads to a 1.38% increase in GDP growth, according to the World Bank. 

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