Struggling Airtel Kenya has been slapped with a $20.25 million fee demand

david nganga

October 12, 2017 6:00 PM

The CA’s demand, if honoured by Airtel, could put more financial strain on the telco.

Mobile operator Airtel Kenya has been slapped with a Sh2 billion frequency spectrum renewal fee demand by the Communications Authority of Kenya (CA), piling pressure on the financially-troubled firm.

CA claims that Airtel is operating at its mercy since its frequency spectrum licence had expired on January 27, 2015 and will only be renewed when it pays the $20.25 million (Sh2.06 billion) fee.

This follows a lawsuit by the telco in August, claiming the CA had agreed to combine its license with those it had bought from moribund Yu Mobile in 2014 for $6.976 million (Sh718 million) and that the regulator changed their stance by asking for Sh2.06 billion for frequency spectrum.

Airtel and Safaricom acquired Yu Mobile’s assets in a joint buyout deal worth Sh12.3 billion. Under the deal, Airtel obtained Yu’s operating licences and subscribers whereas Safaricom acquired the collapsed telco’s network, IT and office infrastructure.

However, CA director-general Francis Wangusi says it is Safaricom that inherited Yu Mobile’s frequency spectrum licence and not Airtel.

Mr Wangusi says that the Sh718 million Airtel paid was only for synchronisation of the telco’s operating licences with those it inherited from Yu Mobile.

The CA’s demand, if honoured by Airtel, could put more financial strain on the company whose current liabilities for the year ended 2016 stood at Sh55.3 billion; exceeding by far its current assets worth Sh9.7 billion.

The telecoms sector regulator insists that Airtel’s plea for a waiver or reduction of the Sh2.06 billion renewal fee can only be granted by ICT secretary Joe Mucheru.

david nganga