Airtel to pay Kenyan regulator $17.5M for expired license

Airtel Kenya has reached an out-of-court settlement with the local telecoms regulator that will see it pay 2 billion Kenyan shillings (US$17.5 million) for an expired license.

According to local publication Business Daily the deal with the Communications Authority of Kenya (CA) was inked on February 11, bringing a lengthy legal fight to a close, with Airtel Kenya promising to pay installments over the next two years to renew its license that expired in February 2015.

Airtel has about 16.7 million subscribers in Kenya according to statistics from market research company Omdia. It's the second biggest operator in the country with about 26% market share, behind Safaricom which controls about 67% of the market.

"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," CA director-general Ezra Chiloba told Business Daily in an interview.

He was referencing the deal whereby both Safaricom and Airtel bought out Essar group's yuMobile back in 2014 for a combined $120 million. Airtel took over yuMobile's 2.55 million subscribers and Safaricom acquired yuMobile's network, IT and office infrastructure assets.

The court dispute seems to have come from the operating license that Airtel purchased from yuMobile. Airtel was under the impression it would merge with its own operating license after the acquisition, while the regulator later said it would have to pay an extra KES2 billion to renew yuMobile's operating permit, which only expires in January 2025.

Ownership issues

Airtel Kenya is also reportedly looking for exemption from the government rule that would require it to have 30% local ownership by 2024. Various local media have reported that it had to pay the $17.5 million to end the license dispute in order to get that exemption.

As part of its 2022 Q3 trading update Airtel said that its Kenyan operation had three years from April 9, 2021 to comply with the requirement to have a 30% local shareholding but that the telco currently holds "an indefinite exemption from the Minister for ICT" dated March 20, 2013.

Airtel Money, which holds a content service provider license from the CA, also has until late 2023 to comply with the 30% local shareholding rule.

Under the amended ICT policy, a telecoms licensees may apply to the ICT Minister for an extension of time to comply with the requirement, or to obtain an exemption.

Airtel Africa, which operates in 14 African markets, reported strong financials for the first nine months of the year with reported revenue up by 21.7% to $3.5 billion and grew its African customer base by 5.8% to 125.8 million.

Airtel Africa had not responded to request for comment on the Kenya license at the time of publication.

*Top image source: jbdodane on Flickr CC 2.0

— The Staff, Connecting Africa