The Communications Authority of Kenya has opened a consultation on a proposed standalone licence for colocation data centres, aiming to give the sector a regulatory framework better aligned with the infrastructure it provides and to support further investment in the country’s digital economy.
The authority has given stakeholders 30 days from September 8 to review and comment on the proposed framework, which would remove colocation data centres from the Network Facilities Provider Tier 2 licensing category.
The change is intended to separate data centre regulation from telecom infrastructure licensing while maintaining regulatory oversight over facilities that increasingly host critical digital services.
Data centres to move out of telecom infrastructure category
Under the existing regime, colocation data centres fall within the NFP Tier 2 category.
The CA said that classification was initially intended to give the regulator visibility over data centre operations, but the category is primarily designed for companies that establish and operate telecommunications network infrastructure.
The proposed standalone licence would instead recognise data centres as providers of infrastructure such as colocation space, power, cooling, storage and computing capacity.
These facilities do not necessarily provide telecommunications services directly to end users, making the current classification an imperfect fit.
The proposed model would allow the CA to retain oversight of the sector without applying requirements designed primarily for network operators.
Proposed licence would run for 15 years
The consultation sets out a separate fee structure for the new data centre licence.
The proposed application fee is KES5,000, while the initial licence fee would be KES100,000.
Annual operating fees would be KES80,000 or 0.4% of annual gross turnover, whichever is higher.
Licences would remain valid for 15 years.
The authority has not yet finalised the framework, and the current proposals remain subject to feedback received during the consultation process.
Existing NFP and ASP licensees would be exempt
The proposed framework would not require every company operating a data centre to obtain an additional licence.
Entities that already hold Network Facilities Provider or Application Service Provider licences would be permitted to establish and operate data centres without applying separately for the proposed data centre licence.
This provision could reduce the risk of duplicative licensing for telecom operators and service providers that already fall under the CA’s existing regulatory structure.
For independent colocation operators, however, the new licence would create a dedicated regulatory route.
CA classifies data centres as critical digital infrastructure
The regulator said data centres have become increasingly important to Kenya’s digital economy because they support services across multiple sectors.
These include internet access, financial services, healthcare, e-government, agriculture and education.
As more public and private services migrate to cloud and digital platforms, the reliability, security and availability of the infrastructure hosting those systems become increasingly important.
The proposed licensing regime is therefore intended to strengthen regulatory visibility while recognising that data centres perform a different function from conventional telecom network operators.
Implementation planned across two financial years
The CA expects the new regime to be developed and implemented through the 2026/27 and 2027/28 financial years.
The roadmap calls for consultation and finalisation of the framework during FY2026/27.
Consequential changes to the telecommunications market structure and implementation of the new regime are then expected during FY2027/28.
This means the consultation represents the beginning of a broader regulatory restructuring rather than an immediately effective licensing requirement.
Kenya targets stronger regional data centre position
The consultation comes as Kenya continues to expand its digital infrastructure and position itself as a regional centre for cloud, connectivity and data centre services.
A clearer licensing framework could provide greater certainty for operators evaluating long-term infrastructure investments, particularly given the capital-intensive nature of data centre development.
It could also help distinguish between telecommunications networks and the physical digital infrastructure used to host cloud platforms, enterprise systems and online services.
As demand for local computing capacity increases, regulatory frameworks around data centres are becoming more important across African markets.
Source: MEA Tech Watch Press Reporter
