The repercussions of a past business deal have cast a shadow over Telkom Kenya, as the telecommunications company grapples with a $40 million debt owed to American Towers Corporation (ATC), and national security concerns intensify due to the ongoing feud between the two entities. This conundrum originates from ATC’s purchase of 715 telecommunications towers from Telkom Kenya five years ago, a transaction valued at $155 million.
The dispute recently came to the fore during a hearing before the Senate Standing Committee on Information, Communication and Technology. ATC accused Telkom Kenya of violating the tower sale and leaseback agreement by defaulting on a debt of Sh4 billion owed to the American company. ATC’s Kenya branch had provided services and honored their end of the agreement. Consequently, ATC Kenya deactivated half of its base towers, causing a network outage across Telkom’s services.
ATC Kenya’s CEO, Thomas Sonesson, explained that the company sought Sh4 billion in unpaid dues from Telkom Kenya, which had leased a portion of ATC’s 3,600 telecommunications towers. The situation escalated when Telkom Kenya deployed police officers to certain tower sites, preventing ATC agents from accessing them, thereby further disrupting services.
Of paramount concern is the potential compromise of national security infrastructure. Telkom Kenya plays a crucial role in providing government communication services to entities like the Office of the President, State House, the Ministry of Interior, and critical defense networks. These services are essential for the military, police, and wildlife services. Additionally, Telkom manages vital security infrastructure, including carrier services, landing stations, submarine cables, and telecom interconnection hubs.
ATC Kenya clarified that some towers that were not sold to them are retained by national security agencies. These towers are reportedly not utilized by these agencies, as a decision was made to retain them under Telkom Kenya’s management.
To address the mounting challenges, the Senate committee plans to summon the Interior and ICT Cabinet Secretaries, the director-general of the National Intelligence Agency, Telkom Kenya’s management, and the director-general of the Communications Authority. This move aims to delve into the Sh4 billion debt issue and the potential security implications arising from the tower dispute.
Telkom Kenya’s predicament is further compounded by existing financial struggles. The Kenyan government is actively seeking a strategic investor to help resuscitate the company. The sale of the telecommunications towers to ATC Kenya in 2018 was intended to bolster Telkom Kenya’s financial position and generate investor returns. Instead, the aftermath has led to a cascade of financial, operational, and security-related challenges.