The Communications Authority of Kenya (CA) is proposing a standalone license category for colocation data center operators. As it stands, these operators are licensed under the Network Facilities Provider-Tier 2 (NFP-T2) category, a mismatch as data centers don’t provide telecommunications services to end users.
The authority says that a separate license would give it the requisite regulatory visibility over critical digital infrastructure while avoiding an over-application of Network Facilities Provider licensing requirements.
“The proposed approach is intended to provide regulatory clarity, enhance visibility over data centre operations, support investment in digital infrastructure, and align Kenya’s framework with proportionate approaches adopted in comparable jurisdictions. The proposed license will cover entities that provide colocation data centre services, including the attendant supporting services,” the CA said in a notice.
The CA has proposed a slew of regulatory fees including: a KSh 5,000 (US$ 38.64) application fee, a KSh 100,000 (US$ 772.74) initial fee, and an annual operating fee of KSh 80,000 (US$ 618.19), or 0.4 percent of gross annual turnover, whichever is higher. License terms will run for 15 years. Furthermore, a Universal Service Fund fee will also form part of costs. Presently, the fee amounts to 0.5 percent of annual gross revenue, though this could change.
An NFP-T2 license currently has an application fee of KSh 5,000 (US$ 38.64) with a 15-year license fee of KSh 15 million (US$ 115,910) or 0.4 percent of gross annual turnover, whichever is higher. A standalone data center license would cut these fees substantially.
The CA notes that entities with an existing NFP or Application Service Provider license won’t need a data center license to establish and operate facilities.
The proposal is currently up for public consultation with the public and stakeholders being granted 30 days to submit their comments to the CA. Based on those consultations, the framework will be finalized before a revision of the telecommunications market structure takes place. Implementation of the framework is currently planned for the 2027/2028 financial year.
Even under the current categorization, Kenya is an attractive market for data center developers and operators. Earlier this week w.media reported that Digital Realty expanded its data center campus in the capital city after opening Nairobi Two Data Center. The facility has a capacity of 6.2 MW with 4,000 square meters of IT space available.