The Communications Authority of Kenya (CA) recently released the Proposed Licensing Framework for Data Centers (the draft Framework) for comments. The CA which regulates Kenya’s ICT sector is working to establish a standalone licence for co-location data center services, providing businesses with physical and digital hosting infrastructure including power, cooling, storage and computational power. Co-location allows companies to lease space to store their servers and hardware, which lowers operation costs and allows for flexibility.
This draft Framework aligns with the National ICT Policy that requires the government to build infrastructure supporting key digital economy sectors and to develop enabling frameworks including licensing of data center operations. A key objective of the ICT Policy is to promote Kenyan businesses and county governments to share data center infrastructure to minimise network duplication that reduces costs. A distinct licensing structure ensures data centers are regulated as shared digital utilities particularly when the data centre operator does not provide telecommunications services.
The draft Framework aims to change co-location data centers from their previous licence category, Network Facilities Provider Tier 2 licence (NFP-T2) to a standalone licence category, which will enhance visibility over data centers’ operations. Data centers will be separate from telecommunication categories to support the lowering of compliance barriers. If a company only operates a co-location data center, it will be placed under the new standalone data center licence category. It will not be subjected to the telecommunication rules for the NFP- T2 category which was developed for entities establishing and operating telecommunication network facilities. It is worth noting that entities that currently have NFP or Application Service Provider (ASP) licences do not have to obtain the data center licence to carry out their operations.
The draft Framework also significantly lowers the licence costs from the NFP-T2 categorisation, reducing the barriers to entry for data centers. The initial licence fee in the current NFP-T2 is KES 15,000,000 while in the proposed framework, the fee is KES 100,000. The recurring annual operating fees reduce from KES 800,000 to KES 80,000. This proposed change is aimed at enhancing the country’s competitive edge in the region to attract investors. This draft Framework is scheduled to be finalised in the 2026/2027 financial year and implemented in the 2027/2028 financial year.
The comments from stakeholders and the public were received by the Communications Authority and the Authority will review the feedback to finalise the framework for implementation in the 2027/2028 financial year.
Proposed Licensing Framework for Data Centers.
Para 6.1.2, ICT Policy, 2020.
Para 17,Proposed Licensing Framework for Data Centers, 2026.
Para 7, Proposed Licensing Framework for Data Centers, 2026.
Para 10,Proposed Licensing Framework for Data Centers, 2026.
Para 28.1, Network Facility Provider Tier Two Licence, 2026.
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