American Company Tells On Telkom For $28.5M Debt

An American Tower Corporation has informed the Kenyan Senate Committee that Telecommunications Company Telkom Kenya owes them $28.5 million for a telecommunications tower sale and leaseback transaction.

The transaction is dated October 2018 but the Senate ICT Committee, led by Trans-Nzoia Senator Allan Chesang learnt about this from the American corporation on Tuesday.

Upon learning this, the Committee Members 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 account so that they may find the best way forward. ATC Kenya sites are home to cellular and wireless, radio and television broadcast, microwave, and two-way radio communications equipment.

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 (MSLA) 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.

Telkom Kenya has been negatively hitting headlines since its full acquisition by the government last year. Treasury acquired a 60 percent stake in the telco from UK-based private equity fund, Helios Investment Partners, for $43.3 million, making the company fully state-owned.

However, following the acquisition, controversy surrounded the purchase after it was revealed that it was done without the approval of parliament. The purchase also happened at the time when the telco was going through financial turbulence because of its huge $66.9 million debt burden owed to the Communication Authority of Kenya (CA).