Airtel, CA permit renewal row goes to court

Communications Authority of Kenya (CA) director-general Francis Wangusi. FILE PHOTO | NMG
Communications Authority of Kenya (CA) director-general Francis Wangusi. FILE PHOTO | NMG 

Telecoms operator Airtel Kenya has taken its renewal of operating permit fight with the Communications Authority of Kenya (CA) to the High Court, laying bare details of the vicious three-year battle whose secrets have remained closely guarded.

Airtel filed the suit, seeking to block the CA’s fresh demand that it pays $20.025 million (Sh2.062 billion) spectrum fees before the operator’s licence can be renewed.

The CA’s demands are contained in letters sent to Airtel on June 23 and July 25 this year as a condition for the renewal of the telco’s network facility provider licence.

Airtel insists that the CA had promised to merge its operating licences with the ones it purchased from Yu Mobile in 2014 for the $6.976 million (Sh718 million) it paid to acquire the Yu Mobile licences.

Airtel claims that its newly-acquired licences are due to expire on January 27, 2025 but shortly after it paid the Sh718 million in December 2014, the CA shifted goalposts and demanded an additional Sh2.062 billion as a condition for renewing Airtel’s licences.

The demands have thrown Airtel’s status in limbo with its original licences having expired on January 27, 2014. The telecoms operator has since been operating on the strength of the licences acquired from Yu Mobile at the centre of the dispute with the CA.

Airtel says in fresh court filings that the CA has still refused to issue it with a new licence bearing Airtel’s name and incorporating new terms and conditions set by the regulator.

“Once the payment in the sum of $6.975 million (Sh718 million) was made by Airtel to the CA, the only outstanding item was the finalization of the actual terms and conditions of the main operating licence which were discussed and concluded in February 2015,” says Airtel legal and regulatory affairs director Joy Nyaga in suit papers.

Ms Nyaga says Airtel is aggrieved by the demand for $20,025,000 as spectrum fees, terming the decision illegal and unjust.

“The CA’s decision is unreasonable since without a basis it contradicts and disregards the terms and conditions previously communicated to Airtel by the CA requiring the applicant to pay a sum of $6.976 million prior to its licence being renewed,” Ms Nyaga adds. The CA is yet to respond to the suit.

Justice George Odunga has ordered that despite the courts being on recess, the CA and Airtel appear before the judge who will be on duty to attend to urgent suits filed.

Airtel and Safaricom #ticker:SCOM jointly bought out Yu Mobile in 2014 in a $120 million (Sh12.3 billion) deal from India’s Essar Capital Limited.

Under the deal, Safaricom acquired Yu Mobile’s network, IT and office infrastructure while Airtel absorbed Yu’s subscribers and operating licences.

Fresh court filings have revealed that the CA in June 2015 wrote to Airtel, stating that the total sum required for Airtel’s licence renewal was $27 million (Sh2.781 billion).

The regulator, however, said it had acknowledged receipt of Airtel’s $6.976 million (Sh718 million) and deducted it from the total required, leaving a balance of $20.025 million.

Airtel then wrote to the CA on June 29, 2015 requesting the regulator to withdraw the demand and issue it with a revised licence in the telco’s name and expiring on January 27, 2025. But the CA in a letter dated November 6, 2015 stood its ground and demanded the amount.

CA director-general Francis Wangusi and former chairman Ben Gituku in April last year claimed that some individuals who were by then members of the regulator’s Board of Directors had demanded bribes from Airtel in return for a favourable ruling on the licence standoff.

The National Treasury shortly after backed the CA Board’s stance, adding that Airtel did not obtain any frequency spectrum from its purchase of part of Yu Mobile and supported the calls for an additional Sh2.062 billion fee.

Airtel has asked the High Court to quash the demand letters issued by the CA and to have the telecoms sector regulator ordered to issue it with a fresh licence to expire on January 27, 2025.