Airtel Kenya and the Communications Authority of Kenya have reached an out-of-court settlement agreement over an expired licence litigation which has protracted over the past seven years.
- The agreement was reached last week and would see Airtel Kenya pay $17.5 million to renew its licence.
- The dispute stemmed from Airtel’s 2014 acquisition of yuMobile from Essar Telecom Kenya.
- Airtel claimed the Kenyan telecom regulator had agreed to merge its operating licence with yuMobile’s, but changed its stance once the deal was finalised and insisted on the $17.5 million payment.
Both parties reached the agreement last week. And as part of the terms of the agreement, Airtel Kenya would pay the sum of Sh2 billion ($17.5 million) to the telecom regulator for its licence renewal.
The payment would be spread out over the next two years. Airtel Kenya’s licence had expired since 2015, according to Business Daily.
“Taxpayers are guaranteed of receiving about Sh2 billion in the next two years. They came up with a payment plan, which we agreed on. The idea was to have this matter resolved so that they can also start focusing on investing properly in this particular space,” said Ezra Chiloba, the Director-General of the Communications Authority of Kenya.
“We have had this long-standing dispute with Airtel over the Essar transaction. The dispute has been there for seven years. But I am glad to report that we struck a deal and this is a major achievement for us.
Here’s the backstory on this development
In 2014, Airtel had paid Sh752 ($6.976 million) to acquire yuMobile from Essar Telecom Kenya. The company claimed that at the time of acquiring the yuMobile assets, the Communications Authority of Kenya had agreed to merge its operating licence with yuMobile. But once the deal was finalised, the telecom regulator insisted that Airtel must pay Sh2 billion ($17.5 million) to renew its operating permit.
On its part, the Kenyan telecom regulator insisted that the yuMobile licence was not automatically transferred upon the acquisition by Airtel. Hence, the reason why the telco must pay to renew its operating licence.