According to a report via TelecomPaper, Airtel Kenya is in a stalemate with regulators over the renewal of its operating licence. The report reveals that the Communications Authority of Kenya (CA) is insisting that the operator must pay KES 2.1 billion to stay in business.
The report revealed that Airtel has been seeking a review for over a year now; however, it has had no luck in the matter. This has led to the current deadlock that saw Airtel’s licence expire in February 2015 and the renewal process dragging on six months later. In the meantime, Airtel is operating on a licence acquired along with the Yu assets early this year.
The report states that the CA is demanding KES 2 billion for spectrum fees, KES 30.2 million for initial annual operating fees, outstanding frequency fees of KES 24.9 million and a penalty payment of KES 1.5 million to renew Airtel’s licence. Airtel Kenya managers told the Business Daily they had met all conditions for the renewal — a claim that the CA denied, saying Airtel has not paid the fees.
Francis Wangusi, the CA director-general, said any applicable fees must be paid by Airtel before the licence is renewed and that the Yu licence it’s currently operating under was not automatically transferable. The CA, added, considered and accepted the use of Yu’s licence pending conclusion of the application. The CA, however, did not disclose how much Airtel paid for Yu’s GSM licence. In 2014, in a joint buyout valued at KES 12.3 billion, Airtel acquired Essar Telecom subsidiary Yu’s subscribers, GSM licences and subscriber-related contracts.
Airtel has released the following information regarding the above: “Airtel Kenya initiated its Licence renewal process with the Communications Authority of Kenya (CA) on the 23rd of January, 2013 as per the licence conditions. On the 11th of August, 2014 the CA outlined the agreed conditions to synchronize Airtel Kenya’s Licence renewal with the acquisition of Essar’s Licences and Customers. All regulatory approvals were formally sought and obtained with the Competition Authority of Kenya (CAK,) giving its approval to the transaction on the 2nd of October 2014. Airtel met all the conditions, including payment of the agreed fees, to the CA and written confirmation was received on the 27th of January, 2015 in that regard.”
“In February 2015, Airtel and the CA concluded the negotiations of the licence terms and conditions and network roll out obligations. We are currently waiting for the CA to issue the agreed Licence terms and conditions.”