Kenya’s tech sector has seen tremendous growth from mobile money to cloud computing. Even as the country enjoys a reputation as a leader in digital innovation, there are millions of Kenyans mostly in rural and underserved areas that are still disconnected from the digital economy.
This is where the Universal Service Fund (USF) comes in. It is a government initiative administered by the Communications Authority of Kenya (CA). Its main mission is to bridge the digital divide. The USF helps finance ICT infrastructure and services in areas that private companies may find commercially unviable. At this point you may be wondering, what is the USF and why should tech startups, telcos, innovators, and everyday Kenyans pay attention?
What Is the Universal Service Fund?
The Universal Service Fund is a financing mechanism designed to ensure all Kenyans can access basic communication and digital services. It is meant to open access regardless of their geographic location, socioeconomic status, or level of infrastructure development. This is to help more people get access to digital services they previously would not have accessed easily and affordably.
It was established under the Kenya Information and Communications (Amendment) Act, 2013. The fund is managed by the Communications Authority (CA) which also identifies the underserved areas, issues tenders, and monitors the projects already funded.
How Is the USF Funded?
The fund is financed through a 0.5% levy on the annual gross turnover of licensed telecom operators. Funding may also come from:
- Government grants
- Donor support
- Public-private partnerships
The USF has been used to implement several programs as it works on expanding connectivity and improving digital literacy. Some of these initiatives include:
1. Telecom Towers in Underserved Areas
The USF has supported the rollout of base transceiver stations (BTS) or telecom towers in remote parts of counties such Garissa, Turkana, Marsabit, Tana River, and West Pokot. Through these towers communities that were previously overlooked can get access to mobile coverage and 3G/4G internet.
2. Digital Connectivity for Public Secondary Schools
The USF has helped provide internet access to public secondary schools in rural areas through the School Connectivity Project,
3. Broadband Subsidies
The fund has been used to subsidize the deployment of fibre-optic and wireless broadband infrastructure in locations where market-driven rollouts are not commercially viable.
4. Community ICT Centers
The USF has also supported the setup of community resource centres and ICT hubs. These hubs offer access to the internet, digital training, and basic government services.
By 2023, USF investments had helped connect more than 700,000 Kenyans living in previously underserved regions.
USF for Kenya’s Digital Future
1. Closing the Digital Divide
Millions of Kenyans still live in areas without reliable connectivity. The USF ensures that digital access becomes a right for Kenyans.
2. Open Economic Opportunities
Connectivity enables everything from digital payments and mobile commerce to remote work, online education, and access to government services. The USF increases national productivity by expanding access to digital services.
3. Startup Growth
The USF provides last-mile connectivity making it easier for startups to scale in areas previously considered unreachable.
4. Encouraging Emerging Technologies
Widespread digital infrastructure also sets the stage for future tech like 5G, IoT (Internet of Things), and AI-powered services. Ensuring rural areas are not left out of this evolution is important to guarantee inclusive progress.
Challenges Facing the Fund
The USF has faced some criticism and scrutiny:
- Slow disbursement of funds – Some stakeholders say the pace of implementation has lagged.
- Underutilization – Reports have highlighted that a large portion of collected funds remains unused each year.
- Lack of transparency – Civil society and policy experts have called for more openness around project selection and execution.
- Limited participation from startups– Most USF tenders favor large telcos and established firms, excluding local innovators who may offer more agile, cost-effective solutions.
What Needs to Change?
Stakeholders are pushing for key reforms including:
- Opening up funding to tech startups and community ISPs
- Real-time reporting on project progress and financials
- Public input on which areas or communities get prioritized
- Better alignment with Vision 2030 and Digital Economy Blueprint goals
Summary
Even with the challenges, the USF is an important tool that can ensure no one is left behind with digital advancementsl. It helps bridge the access gap, accelerates innovation, and ensure all Kenyans can enjoy the benefits of internet expansion.
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