Safaricom set to earn Sh8bn for managing security system

Mergers, Acquisitions and Financial Results

Telecoms operator Safaricom will earn a Sh2 billion annual fee for its management of the national security communication system, which the government has contracted it to build and operate for a period of five years.

Safaricom plans to spend Sh12 billion on the project that the government will reimburse in phases, a key pitching point that enabled it to win the contract without tendering.

Kenya’s leading mobile telecoms operator also sweetened its pitch by offering to manage the system for one year for free, meaning the government will spend a maximum of Sh8 billion on the five-year contract instead of Sh10 billion.

“The five- year management contract will earn Safaricom Sh2 billion annually for four years. Part of our pitch was that we manage the system for free in the first year,” Safaricom chief executive Bob Collymore said.

The company is to build a high-speed fourth generation network — also known as Long Term Evolution network — and supply the police with radio communication devices (GSM walkie-talkies fitted with SIM cards).

Telecoms industry analysts said the deal has effectively tilted the market in favour of Safaricom because it frees the operator’s hands to move to a higher quality platform.

Rivals Airtel, Orange and yuMobile must keep using the third generation platform until the State cuts through the maze of regulations it had set around the 4G network.

Safaricom on Wednesday made a presentation to President Uhuru Kenyatta at his Harambee House office and agreed to roll out the project in Nairobi by December.

Safaricom is expected to build 60 LTE base stations in Nairobi, 20 in Mombasa and install 1,800 CCTV damage-proof, high definition and ultra-high definition cameras across the two cities that have recently become the targets of terrorist attacks.

The system will initially handle communication from 7,600 security agents at any given time – a capacity that will gradually expand to 50,000.

Safaricom’s savvy offer to the government is being seen as part of the company’s charm offensive meant to win it more frequencies and grant it an easy pass through an impending renewal of its operating licence next month.

The mobile operator has also promised to offer free internet connectivity to all public primary schools that will benefit from the government-sponsored laptops project.

The security system will be connected to a national command and control room that IBM has set up at the police headquarters and comes with a network of spy cameras that are linked to computers for purposes of analysing the faces of targeted individuals and other data to help identify and track suspects.

“Once linked to the national command and control system, we will have the ability to do a deep analysis using big data analytics tools,” said Mr Lenku.

The security system is to run on dedicated frequency and infrastructure separate from Safaricom’s.

Previous attempts to procure a technologically advanced security system have collapsed in a web of mega corruption.

Apart from Anglo-Leasing, the lucrative tender had also attracted two Chinese firms Huawei and ZTE who fought bitter court battles over its award, leading to its cancellation.

When fully installed, the security system will operate a new set of police walkie-talkies with cameras both at the front and the back that can take pictures at crime scenes for assessment and evidence. The pictures can also be sent in real time to the command and control centre.

The walkie-talkies will also have tracking capabilities to improve disaster response. This will make it easy to track police officers closest to a crime scene for faster response.

Once complete, the system will be managed and operated independently by the government’s security agencies and will not share any of Safaricom’s active infrastructure.