Economy

Tower firm demands Sh500m to switch Telkom Kenya back on

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A silhouette of a communication mast. FILE PHOTO | JOSEPH KANYI | NMG

The dispute between Telkom Kenya and American Towers Corporation (ATC) has taken a new twist with the foreign company now demanding a down payment of Sh500 million and Sh150 million per month to turn on the 246 mast sites switched off seven months ago.

The debt owed by Telkom Kenya has also risen from Sh4 billion in May to Sh7.1 billion as of October. The amount is expected to grow as the debt accrues interest at the rate of Sh300 million per month.

ATC Kenya chief executive Thomas Sonesson, while appearing before the Senate ICT Committee accused Telkom Kenya of breaching a contract that it entered in 2018. He also revealed that the company has put on hold several investments in the country due to the debt and is currently unable to meet its obligations including meeting the operating cost.

The firm has been paying a value-added tax (VAT) of Sh50 million a month to the taxman since January due to the invoices they sent to Telkom Kenya that have never been paid.

“We have not been paid since January this year. This led to the event we decided to disconnect 900 out of the 1,000 leases that we have with Telkom Kenya. When I sent an invoice of Sh300 million linked to the leaseback to Telkom Kenya, there is a Sh50 million VAT that we are required to pay to Kenya Revenue Authority,” said Mr Sonesson.

It is a cash out for us that we are not getting paid but we are paying the VAT.” Mr Sonesson said.

Efforts to resolve the dispute have also proved futile for the past two years with Telkom Kenya insisting it is not able to pay the debt and it requires a strategic investor and clearance of pending bills by the government to put in place a payment plan for the debt

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