Telkom owes US firm Sh4b for tower sale, Senate committee told
By John Otini, June 30, 2023
Telkom Kenya owes Sh4 billion to American Tower Corporation (ATC), a hurdle that stands in the way of the government fully acquiring the struggling firm.
“The Senate Committee on Information, Communication and Technology led by Trans Nzoia Senator Allan Chesang, heard that Telkom Kenya owes the American Tower Corporation Sh4 billion for a telecommunications tower sale and leaseback transaction dated October 2018,” the National Assembly said on its website.
While considering a correspondence on the request for intervention by ATC Kenya, the telecommunications infrastructure operator informed the Members of the Committee that Telkom has failed to meet its Master Site License Agreement.
Permit approvals
This is despite ATC Kenya providing services and upholding its agreements.
The independent passive telecommunications infrastructure owner also informed the Senator Chesang-led Committee that the County Governments of Meru, Mombasa, Kajiado and Laikipia have increased fees for permit approvals and annual business licenses imposed on telecommunication tower sites.
Members of the committee resolved to invite ATC Kenya’s Management to further expound on the matter as well as Telkom Kenya’s Management and the Governors of the affected counties to give their accounts to find the best way forward.
The financial status of Telkom Kenya is still in the red even after the government bought back a 60pc stake from Helios Investment Group.
Broadcasting Principal Secretary Prof Edward Kisiang’ani says the legal status of Telkom Kenya is still contestable as the transaction was not completed forcing American Towers company to shut down critical infrastructure that are of national security nature.
Telkom Kenya owns 723 towers which were transferred to American Tower Corporation. Information, Communication Technology & Digital Economy Cabinet Secretary Eliud Owalo (pictured) appealed to Parliament to relook at the privatisation policy to prevent a recurrence of the same. Legislators were also concerned about rising cases of hacking and other forms of cybercrime.
Owalo said the cost of calls will from next month be lower when the mobile termination rate is further reduced.