Telkom kenya Pays Safaricom Kshs. 693 Million in Interconnection Arrears



Following the announcement that Orange Kenya was offloading its 70% stake in Telkom Kenya, various demands were raised by various institutions the telco owed. The Communications Authority of Kenya demanded Kshs. 1.5 billion debt get settled by the firm in order to give its approval for the sale.  The debt comprised of accrued frequency and operating fees for 2014 and 2015. The company settled part of the debt owed to the regulator.

The other demand was from former employees of the telco, laid off between May and June 2006. The 996 employees sued Telkom Kenya stating it acted in a discriminatory manner when paying employee packages. The Telco finally settled with employees  in an out-of-court settlement, where the employees received Kshs. 1.8 Billion.

The other claimant was Safaricom that placed a demand for of Kshs. 693 million for failure to pay interconnection fees, and some liabilities it inherited from a tower sharing deal with Essar Telkom Kenya, which is now non-operational. According to Business Daily, Telkom Kenya has finally settled the amounts owed in interconnection fees but is yet to settle 76 Million from the Essar deal. The companies are in negotiation on how to settle the remaining amounts.

Helios Investment Partners has since taken over the operations of Telkom Kenya including a new management team.  In the budget statement, the CS for Finance announced plans by the government to increase its stake in the company to 40%. The government is set to offset part of the debt Telkom Kenya owes in exchange for the extra 10% stake.

SOURCEBusiness Daily
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Eric writes on business, govt policy and enterprise tech.