Telkom’s $4bn Feud Sparks Massive Mast Shutdown
The acquisition of 715 towers from Telkom Kenya for $155 million by American Towers Corporation (ATC) five years ago has come back to haunt the telco, with the Senate warning that the dispute between the two companies threatens the nation’s security infrastructure.
Documents presented to the Senate Committee on Information and Technology disclose a conflict that disrupted Telkom network services across the country a few weeks ago.
ATC alleged in its submissions that Telkom Kenya violated the tower sale and leaseback agreement by neglecting to pay the American company Sh4 billion despite providing services and upholding its end of the bargain.
A few weeks ago, the ongoing conflict between Telkom and ATC escalated when ATC Kenya shut down half of its base antennas located throughout the country.
Several Kenyans pleaded with the company to restore the Telkom network after the conflict resulted in the loss of the network.
Thomas Sonesson, the chief executive officer of ATC Kenya, stated that the company is seeking Sh4 billion from Telkom Kenya, which has leased a portion of its 3,600 telecommunication towers.
He told the Senate Committee on ICT, convened by Senator Allan Chesang of Trans Nzoia, that the State has prevented ATC Kenya from investing in additional towers in Kenya.
The company sent Telkom Kenya multiple notices notifying the telco of the enormous debt, but Telkom Kenya did not respond, causing the company to cease covering the electricity costs for the masts.
In an act of retaliation, ATC Kenya claimed that Telkom Kenya had deployed police officers to several masts, preventing ATC Kenya agents from obtaining access to the sites where the masts are located and thereby causing a service disruption.
“Telkom Kenya denied ATC Kenya access to the lease sites, in violation of the provisions of the lease, thereby disrupting services such as connectivity, mobile money transfers, and voice communication.
Mr. Sonesson stated that eight clients, including MNOs, ISPs, and broadcasters, have been offline since May 15, 2023, impeding the government’s digital transformation agenda.
A few weeks ago, while testifying before the committee, ICT Cabinet Secretary Eliud Owalo stated that the ongoing conflict between the two entities poses a threat to national security, given that Telkom Kenya is responsible for critical infrastructure.
“I must raise this important issue to the attention of legislators because, as you all know, Telkom transmits sensitive security data. Sadly, we privatized security-related infrastructure. Mr. Owalo informed the senators that, on the one hand, American Towers asserts that it owns the towers, while Telkom asserts that it does not own the land.
According to Broadcasting PS Edward Kisiang’ani, the government’s endeavors to assist the two companies in resolving their impasse have encountered obstacles.
Telkom Kenya claims to be a private corporation, but the government, through Helios, owns sixty percent of the company’s shares.
“I implore the senators to prevent the privatization of security infrastructure, as it poses a significant threat to the nation. The government will seek a new investor, Dr. Kisiang’ani informed the committee.
Senators raised security concerns during the hearing, stating that Telkom Kenya transmits vital government infrastructure.
Telkom Kenya provides essential communications services to the Office of the President, the State House, the government data center, the Ministry of the Interior, the General Service Unit, the restricted communications networks of the Department of Defense, and other essential State functions. Telkom Kenya is in charge of the military, police, and conservation service.
The data centers, data rooms, and base stations also manage vital security infrastructure, such as carrier services, landing stations, undersea cables, and meeting rooms where telecommunications companies connect.
Telkom’s $4bn Feud Sparks Massive Mast Shutdown
