Companies

Airtel Kenya pays Sh1.1bn for licence

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An Airtel shop in Nairobi. FILE PHOTO | NMG

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Summary

  • Airtel Kenya has paid the government Sh1.13 billion ($10 million) in fees for a network licence to cater for the increased demand for its mobile data services.
  • Airtel had temporarily acquired the license for two years to February 2022 to support increased demand for its data services when businesses opted to work from home to contain the spread of the Covid-19 disease from 2020.
  • The Sh1.13 billion payment will be followed by a $20 million (Sh2.2 billion) fee for the current licence that Airtel has been using since 2015 and which the telco agreed to settle over the next three years.

Airtel Kenya has paid the government Sh1.13 billion ($10 million) in fees for a network licence to cater for the increased demand for its mobile data services.

Industry regulator Communications Authority of Kenya (CA) disclosed that Airtel paid the money last month, paving the way for use of the new spectrum for 10 years.

Airtel had temporarily acquired the license for two years to February 2022 to support increased demand for its data services when businesses opted to work from home to contain the spread of the Covid-19 disease from 2020.

The Sh1.13 billion payment will be followed by a $20 million (Sh2.2 billion) fee for the current licence that Airtel has been using since 2015 and which the telco agreed to settle over the next three years.

The payments are the outcome of an out-of-court settlement with the government.

The telco signed the agreements with the CA in February, allowing Airtel to start negotiations meant to exempt the firm from a rule that requires local shareholders to own at least a 30 percent stake in telecom companies by March 2024.

“On 16th March 2022, the Authority issued Airtel Networks Kenya Ltd with a frequency license for a non-contiguous 2x10 MHz block of spectrum in the 2100 MHz band at an initial spectrum license fee of USD$ 10 Million valid for 10 years,” says the CA in disclosures.

The spectrum allows a mobile service operator to offer their customers large data bundles without necessarily increasing the monthly cost to users.

Demand for mobile and fiber-backed Internet peaked in March 2020 when the government ordered businesses and public offices to work remotely, banned social gatherings, and restricted movement in a bid to curb the spread of Covid-19.

The closure of learning institutions for more than a year due to the restrictions also increased demand for mobile internet service during the period.

Airtel and other internet service providers (both mobile and fixed) ramped up investments by acquiring new spectrum licences and building more towers to provide reliable internet services in the wake of the increased demand.

Acquisition of the spectrum licence boosted Airtel’s efforts to capitalise on the peak in demand for Internet services at the height of the coronavirus restrictions in a bid to reduce the dominance of Safaricom ticker:SCOM .

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