Troubled Kenyan telco reportedly on the brink after towers shut down due to bill dispute
Kenya’s Communications Workers Union (COWU) has called for the government to bail out Telkom Kenya to save it from potential collapse, according to the Kenya Broadcasting Corporation. The report said the debt-laden telco was on the “brink of collapse” after American Towers Corporation (ATC) reportedly switched off half of its masts across the country in response to a Ksh200m (€1.3m) pending bill.
COWU general secretary Benson Okwaro said the telco was struggling with debt and could soon shut down, impacting around 600 workers and making it difficult for subscribers in the affected regions to call, browse the internet and send money. Customers have taken to social media to voice their concerns.
In 2018, Telkom sold 723 base stations to ATC on a sale and leaseback agreement to cut its opex. “These masts belonged to Telkom. Now the company has to lease to use them and is unable to pay,” said Okwaro.
The union also warned the Kenya Government’s intelligence communication system was at risk should Telkom fail. “If we don’t come to the rescue of Telkom Kenya then it means the intelligence network of this country is going to go into private hands. I have not seen any country in the world that allows its intelligence network to be infiltrated with private players,” said Okwaro.
Call for enquiry
In a press briefing, the union called for an enquiry into the government’s 2021 takeover of the struggling telecommunications firm when it bought out UK private equity fund Helios Investment Partners. Helios originally bought its stake from Orange. It has also emerged that the failure to consummate the joint venture between Telkom Kenya and Airtel Kenya in 2019 was also another major factor prompting the exit of Helios, according to Business Daily Africa.
Okwaro said the government should match the Ksh6bn (€39.2m) Helios received to bail out Telkom. “Helios had a Ksh6bn investment which they took after the government bought their 60% stake. Therefore, a similar investment must be done to revive the company,” he said.
Last October, a forensic audit on the National Optic Fibre Backbone (Nofbi) Phase 1 project revealed Telkom Kenya lost Ksh575m (€5m) while running a government-owned fibre optic network contract worth Ksh16bn (€134m).