Commercial data centres are now formally regulated by the Communications Authority of Kenya (CA) as the country races to adopt evolving technologies such as artificial intelligence (AI) in key sectors of its economy.

Revised regulations by the CA have placed commercial data centres under the telecommunications licensing regime—marking a shift from previous rules published in 2021, which did not expressly recognise the facilities.

“The revised structure expressly incorporates data centres into the telecommunications market framework. This is a significant policy signal, confirming that commercial data centre operations are now viewed as part of Kenya’s regulated communications infrastructure landscape,” analysts at law firm, Bowmans, said in a note.

Under the 2021 Telecommunications Market Structure, the CA licensing framework only covered four broad market segments, including: national network facilities providers; international network facilities providers; community networks and service providers; and terminal equipment providers.

“While this framework supported a wide range of communications activities, it did not expressly address data centres. As a result, entities seeking to establish or operate commercial data centres were required to engage directly with the Authority on a case-by-case basis to determine how their activities aligned with the existing framework, resulting in an uncertain operational climate,” the law firm said.

The analyst said that the inclusion of commercial data centres in CA’s licensing framework is a boost for investors.

“Market participants now have clearer visibility on how data centre operations are treated within Kenya’s telecommunications framework. The Revised Structure aligns licensing policy with Kenya’s broader digital economy ambitions, including cloud adoption, regional connectivity, fintech, and data-driven services,” Bowmans said.

“For investors and developers, the formal recognition of data centres reduces regulatory ambiguity and supports long-term infrastructure planning. Existing infrastructure players may find new opportunities to expand into data centre services as part of their broader network strategies,” it added.

Kenya is currently pushing a global appeal for tech investors to build artificial intelligence (AI)-capable data centres in the race to close the growing infrastructure gap.

Read: Kenya courts EU for fibre, AI data centre investments

Data centres are the main infrastructure powering AI by providing the high computing power, specialised computer hardware, and the large storage needed to train and deploy complex language models.

Kenya has only two AI-capable data centres against South Africa’s five and Nigeria’s one, according to Data Centre Map, a global data centre directory.

Data shows that 15 of Kenya’s 19 data centres, mostly light-duty, are located in Nairobi.

Some of the major companies that have been able to build, maintain, and operate data centers in the country include EADC Liquid, iColo, Africa Data Centre, COMTEC, Access, Safaricom, MTN Business, and Telkom Kenya.

AI technology allows computers and machines to simulate human intelligence and problem-solving tasks. The technology can be applied to many sectors and industries, including healthcare, manufacturing, mining, and the military.

These data centers enable mobile network providers, banks, internet service providers, retailers, and content providers to centralise their computing and networking equipment for the collection, storage, processing, distribution, and access to large amounts of data.

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