Airtel appeals for Sh2.1 billion frequency licence fee waiver

Tuesday February 9 2016

Airtel Kenya CEO Adil El Youssefi during the launch of a new product dubbed “UnlimiNet 20 bundle” at the Intercontinental Hotel in Nairobi on January 25, 2016. Airtel Kenya has lodged an appeal with ICT Cabinet Secretary Joe Mucheru for a waiver of the Sh2.1 billion frequency licence fee that the Communications Authority of Kenya ruled that it should pay. PHOTO |  SALATON NJAU

Airtel Kenya CEO Adil El Youssefi during the launch of a new product dubbed “UnlimiNet 20 bundle” at the Intercontinental Hotel in Nairobi on January 25, 2016. Airtel Kenya has lodged an appeal with ICT Cabinet Secretary Joe Mucheru for a waiver of the Sh2.1 billion frequency licence fee that the Communications Authority of Kenya ruled that it should pay. PHOTO | SALATON NJAU  NATION MEDIA GROUP

By LILIAN OCHIENG'
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Airtel Kenya has lodged an appeal with ICT Cabinet Secretary Joe Mucheru for a waiver of the Sh2.1 billion frequency licence fee that the Communications Authority of Kenya ruled that it should pay.

The telco has been operating on the permit of Essar Telecom after its licence expired in 2015.

The issue in question is a 10-year licence that Airtel received after the expiry of its 15-year permit, which cost it Sh4.7 billion and was obtained in 2000.

“The CA board had decided that Airtel will pay for the licence,” said CA board chairman Ben Ngene Gituku.

Airtel has now appealed to Mr Mucheru with the hope that the National Treasury could waive the demand.

The CA board late last year settled on a decision to have Airtel pay the fee, but members were split on the issue at some point.

Airtel chief executive Adil El Youssefi said the pursuit to have Airtel exempted from the frequency fee stems from an agreement with CA two years ago, when the firm acquired Essar Telecom.

OPERATING LICENCE

Airtel is said to have paid Sh30.2 million for synchronisation of the operating licence it acquired from Essar. Initially, CA had demanded that Airtel pay the balance as frequency spectrum charges.

“On August 11, 2014, the regulator outlined the agreed conditions to synchronise Airtel’s licence renewal with the acquisition of Essar licences and customers,” Mr Youssefi said in an earlier statement.

The renewal of Airtel’s permit is tied to meeting set quality of services targets by the CA. The regulator has now raised the penalties for failure to comply with set targets. Safaricom, Airtel and Orange all failed to meet set targets last year, and were fined Sh500,000.

The disbanded board of CA has quoted the issue of Airtel’s frequency fee as one of the explosive matters ever handled by the team.

In a letter to Mr Mucheru, the board states that their stand on the matter prompted its disbandment on Friday last week.

“What seems to have broken the camel’s back was the board insisting that Airtel Kenya should pay a total of Sh2.1 billion owed to the authority in licence fees by the operator.

“According to records, this fees had initially been waived in unclear circumstances,” said the letter.