Kibaki’s letter gave birth to Kenya’s famed Silicon Savannah
President Mwai Kibaki was in his office at State House. It was early 2008 and he had a lot to mull over in his in-tray, not the least of which was the post-election violence that was raging in the Rift Valley and threatening to consume his presidency and destroy the country.
Suddenly, the Comptroller of State House, Mr Hyslop Ipu, came barging in with a mobile phone in hand. Waiting to talk to him urgently on the other end of the line — 7,500 kilometres away in the United Arab Emirates — was his Information minister, Mr Mutahi Kagwe.
SH35 PER MINUTE
All the way from Abu Dhabi, Mr Kagwe could hear the President tell Ipu to hand over the phone in his famous baritone, “Leta hiyo kitu.”
The journey to that phone call had begun at an insurance industry dinner two years earlier, in early 2006, at the Panari Hotel in Nairobi. Then, Mr Kagwe was the guest of honour.
After his speech, a journalist had asked him to state the one thing he hoped to achieve at the ICT ministry. He told the journalist that he wanted Kenyans to communicate easily and cheaply with the world.
At the time it cost Sh35 per minute to make a phone call within the Safaricom network during peak hours and up to Sh50 per minute to other networks.
These high costs made Kenyans wait until off-peak hours to make cheaper calls, which often clogged the Safaricom network in the evening, rendering it impossible for anyone to get through.
This state of affairs led then Safaricom CEO Michael Joseph to accuse Kenyans of peculiar calling habits, causing a PR crisis for the company. Internet connections, on the other hand, were a nightmare.
The whole country relied on satellites to access the internet. Satellites, however, transmitted data at a glacial pace and were unreliable. To add salt to injury, the cost of a satellite link was exorbitant.
CONDESCENDING
For Mr Kagwe to make it possible for Kenyans to communicate easily and cheaply with the world, there was only one thing to do; abandon satellites and join the global fibre-optic network.
This meant the country needed to lay fibre-optic cables under the sea, an expensive undertaking. So Kenya joined other African countries as a co-founder of South African fibre-optic cable EASSY.
Soon Kenya discovered that there was nothing easy about EASSY. The partner countries constantly bickered among themselves. And the South Africans, who had a controlling interest in the cable, had a condescending attitude towards everybody else.
In their minds, the cable was a business; a cash cow that wealthy South African pension funds were keen to build, own, control and profit from. Kenya, on the other hand, viewed the cable as a development tool; a public utility much like a road, which would provide the foundation for its ICT sector to take off.
Tired of endless meetings and unwilling to put her economy at the mercy of the South African pension funds, Kenya made a decision to stay in EASSY but also build its own cable.
Mr Kagwe called his fellow ICT ministers from Uganda and Tanzania and convinced them to join the plan. Determined to achieve digital independence, Mr Kagwe and his fellow East African ministers travelled to the US, Spain and finally the UAE in search of a way to build their own cable.
5,000 KILOMETRES
In the US, they visited Tyco, one of the few companies in the world with capacity to build undersea fibre-optic cables. On the bus back to the hotel from Tyco’s offices in Baltimore, Mr Kagwe suddenly swung his neck around and announced to his fellow ministers that he had just had a brainwave: they would call their cable TEAMS (The East African Marine System).
Because many cables from around the world terminated at Fujairah in the UAE, which was only 5,000 kilometres from Mombasa, it became clear to the East Africans that the UAE was the most ideal partner in building the cable. Fujairah offered excellent backup options (redundancy) in case one connection failed; as opposed to the EASSY cable, which terminated in Djibouti where there was only one connection, meaning no backup in case of failure. When Mr Kagwe and his team arrived in Abu Dhabi to pursue the matter, they found, to their dismay, that the UAE government did not trust that Kenya and her partners had the capacity to do the project.
The frustrated minister tried for days to get them to sign a deal. But despite visiting all top officials in the country and sharing his dream about a cable called TEAMS, sceptical UAE officials just slammed doors in his face.
But Mr Kagwe was no quitter. So he played the last gambit of a desperate chess player and made a move for the Emir of Abu Dhabi, Sheikh Khalifa. When Kenya’s ambassador to the UAE heard of the idea, he advised the minister that any correspondence to the Emir must come from President Kibaki himself.
EMIR APPROVED
Mr Kagwe did not waste any time. He dialled State House. The President is not a person you just call out of the blue, of course. So he called Mr Ipu instead. Mr Ipu immediately went to the President's office, phone in hand.
Mr Kagwe explained his predicament. Then the government’s top brass swung into action to prepare a letter to the Emir, signed by the President. The Emir responded in the affirmative. Suddenly the mood in the UAE changed. The Foreign Affairs minister invited Mr Kagwe to his office and informed him the Emir considered Kenya a strategic partner and had ordered his government to cooperate.
Their finance minister, who just days earlier had declined to approve TEAMS, now allowed the UAE government to acquire a 15 per cent stake in the venture through Etisalat.
The job of building the cable went to Alcatel-Lucent, a Franco-American company now owned by the Chinese.
All told, TEAMS cost $79 million (Sh8.1 billion) to build, fully funded by the Kenyan government and a consortium of Kenyan firms. The funding was raised by selling stakes in Safaricom and auctioning international gateway licences to investors.
TELKOM MAFIA
Previously, Telkom controlled the international gateway exclusively but its corrupt staff collaborated with crooks to control all international calls in return for a cut.
Hence the decision to open up the international gateway to the private sector unleashed a murderous rage in some quarters. Mr Kagwe and Mr Ndemo recall receiving death threats.
To ensure that the Telkom mafia did not murder the two, 50 police officers were deployed to protect them until the international gateway licence auction was over and the money needed for TEAMS was raised.
Construction started in January 2008 on the Emirates side. On June 12, 2009, the TEAMS cable arrived in Mombasa and President Kibaki, Prime Minister Odinga and other dignitaries launched it.
TEAMs delivered broadband internet to millions of Kenyans. It also brought crisp phone calls. A phone call to Los Angeles was suddenly as clear as one to Athi River. And the cost of the call fell by a staggering 99 per cent.
This unleashed a digital revolution transforming the country into a Silicon Savannah in a few years. Today, a decade later, Kenya enjoys faster internet speeds than the US.
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