Airtel pays regulator Sh4.7bn for 4G licence


Airtel Kenya Ltd headquarters located along Mombasa Road. PHOTO | DENNIS ONSONGO | NMG

Airtel Kenya says it has paid $40 million (Sh4.7 billion) to the Communications Authority of Kenya (CA) for a licence on additional fourth-generation (4G) Internet services in the country.

The payment for the licence was revealed by its London-listed parent firm Airtel Africa Plc in a regulatory filing.

“Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, today announces that its Kenya subsidiary, Airtel Kenya Networks Limited, has purchased 60 MHz of additional spectrum in the 2600 MHz band from the Communications Authority of Kenya, for a gross consideration of $40 million,” Airtel Africa said in a statement on Monday.

The licence is valid from July 2022 for a period of 15 years, the telecoms firm said. Like its rivals, Airtel has signalled it will turn to the Internet to power future growth at a time data is seen as one of the fastest-growing revenue lines for telecoms companies.

“This additional spectrum will support our 4G network capacity expansion in the market for both mobile data and fixed wireless home broadband capability, and will allow for future 5G rollout, providing significant capacity to accommodate our continued strong data growth in the country,” said Airtel Africa.

Airtel Kenya launched 4G Internet services in the country in 2018, stepping up the battle for customers in the telecommunications market.

Safaricom and Telkom Kenya are also aiming to rev up their data business to offset sluggish growth in mobile calls, where the telcos are seeing a small revenue growth due to saturation. Airtel said the licence will also enable the deployment of 5G-ready networks.

New 4G networks will help it capitalise on burgeoning mobile internet use in the country and put it in a race with rivals like Safaricom and Telkom Kenya.

“Airtel Kenya is one of our largest markets by revenue. This investment reflects our continued confidence in the opportunity inherent in the Kenya market, supporting the local communities and economies through furthering digital inclusion and connectivity,” said Airtel Africa.

The latest payout for a 4G licence adds to a flurry of earlier agreements and payments that Airtel Networks Kenya recently signed with the telecommunications sector regulator.

Airtel said in May that it paid $5 million (Sh593 million) to the CA as part of the 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 May payment adds to an earlier $10 million (Sh1.1 billion) for a separate spectrum increase and which it will be allowed to use for 10 years.

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

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.

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