Telkom Kenya woes deepen over Sh4bn owed to US firm
A telecommunication mast in Nyeri town in mid November last year. MPs have raised national security concerns after Telkom Kenya sold its masts to an American firm five years ago.
The purchase of 715 telecommunications towers from Telkom Kenya by American Towers Corporation (ATC) at a cost of $155 million five years ago has come back to haunt the local firm, with senators warning that the country's security infrastructure is at greater risk following the ongoing feud between the two entities.
Documents tabled before the Senate Standing Committee on Information, Communication and Technology revealed the ongoing battle, which led to the disruption of Telkom network services across the country a few weeks ago.
In its submissions, ATC accused Telkom Kenya of breaching the tower sale and leaseback agreement by failing to pay a total of Sh4 billion owed to the American company despite ATC Kenya providing services and honouring its agreements.
The feud reached a climax a few weeks ago when ATC Kenya switched off half of its base towers, leading to the loss of Telkom's network.
ATC Kenya chief executive Thomas Sonesson said the company was seeking Sh4 billion from Telkom Kenya, which had leased some of its 3,600 telecommunications towers.
He told the committee that is chaired by Trans Nzoia Senator Allan Chesang that the State had barred ATC Kenya from investing in towers in Kenya.
The company has sent a number of notices to Telkom Kenya informing it of the huge debt, but Telkom has failed to respond, so the company is no longer bearing the cost of electricity for the masts as a result of the debt owed to the company.
In retaliation, ATC Kenya said, Telkom Kenya deployed police officers at some of the masts, preventing ATC agents from accessing the sites, leading to a disruption of services.
Appearing before the committee a few weeks ago, ICT Cabinet Secretary Eliud Owalo had said the ongoing feud risks compromising the country's security as Telkom Kenya is responsible for critical security infrastructure.
Resolve the impasse
According to Broadcasting Principal Secretary Edward Kisiangani, the government's efforts to resolve the impasse have been met with challenges.
"It is a sad case that, when we try to resolve the issue, Telkom Kenya says it is a private company but 60 per cent of the shares are owned by the government through Helios. I urge senators to ensure that security infrastructure is not privatised because it's a huge risk to the country. As the government, we will look for a new investor," Mr Kisiangani told the committee.
Telkom Kenya provides critical government communications services to the Office of the President, State House and the Government Data Centre, the Ministry of Interior, the General Service Unit, the Ministry of De fence’s restricted communications networks and other critical government functions. The military, police and wildlife services are served by Telkom Kenya.
The Data Centres, Data Rooms and Base Stations also manage critical security infrastructure, including carrier services, landing stations, submarine cables and meet-me rooms where telecoms companies interconnect.
Responding to security concerns, Mr Sonesson said the National Intelligence Agency had retained some of the towers that were not sold to ATC Kenya.
Security concerns
"National security agencies are not using our towers. When we bought the towers from Telkom Kenya, the National Security Council directed that some critical telecommunication towers be retained by Telkom Kenya," Mr Sonesson told the committee.
Mr Chesang and Nandi Senator Samson Cherargey said the committee would summon the Interior and ICT cabinet secretaries, the director-general of the National Intelligence Agency, Telkom Kenya management and the director-general of the Communications Authority over the Sh4 billion debt and security concerns over the use of the towers.
Telkom Kenya has been struggling with debt obligations and the government is now looking for a strategic investor to help turn the company around.
The sale of the masts to ATC Kenya in 2018 was expected to balance Telkom Kenya's balance sheet by generating returns for investors. The sale gave ATC a footprint in the country.
