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Airtel Kenya pays Sh581m for 10-year telecoms licence

Tuesday May 17 2022

The telco now has a balance of $15 million (Sh1.7 billion), which it is expected to settle over the next three years.

IN SUMMARY

  • Airtel Kenya has wired $5 million (Sh581 million) to the Communications Authority of Kenya (CA) as part payment for its operating and spectrum licence running from 2015 to 2025.
  • The latest payment adds to a recent $10 million (Sh1.1 billion) for a separate spectrum increase and which it will be allowed to use for 10 years.
  • This brings the cumulative payouts to $15 million (Sh1.7 billion) in the two deals with the regulator.
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Airtel Kenya has wired $5 million (Sh581 million) to the Communications Authority of Kenya (CA) as part payment for its operating and spectrum licence running from 2015 to 2025.

The telco now has a balance of $15 million (Sh1.7 billion), which it is expected to settle over the next three years. The latest payment adds to a recent $10 million (Sh1.1 billion) for a separate spectrum increase and which it will be allowed to use for 10 years.

This brings the cumulative payouts to $15 million (Sh1.7 billion) in the two deals with the regulator.

“Under this agreement, Airtel Kenya agreed to pay a total of $20 million (Sh2.3 billion) in four installments over the next three years,” the telco’s parent firm Airtel Africa said in a statement.

“The first installment of $5 million (Sh581 million) has been paid and for the balance amount, a deferred payment liability has been recognised in the consolidated financial statements.”

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.

Airtel Networks Kenya Limited, which currently holds an indefinite exemption from the ICT minister, dated March 20, 2013, has three years with effect from April 9, 2021, to comply with the requirement to have a 30 percent local shareholding.

Airtel Money Kenya Limited, which holds a Content Service Provider Licence from the CA, with effect from November 2020, has three years from the date of the licence to comply with the requirement to have a 30 percent local ownership.

The telco’s parent company says the agreement with the government and increased investment in Airtel Kenya’s operation demonstrates its commitment to the local market.

“Airtel Kenya is one of the group's largest markets by revenue, and from 2019 to 2022 financial years grew revenues by 22.2 percent compound annual growth rate,” Airtel Africa said.

“This $30 million (Sh3.4 billion) investment reflects our continued confidence in the tremendous opportunity inherent in the Kenya market.”

The addition of 10 MHz in the 2100 band will help Airtel Kenya to maximise network capacity and coverage.

vjuma@ke.nationmedia.com

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