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Telkom faces mounting debt as ATC demands Sh500 Million for Mast site reactivation

Christine Akinyi by Christine Akinyi
December 7, 2023
in News
Reading Time: 2 mins read

The disagreement between Telkom Kenya and American Towers Corporation (ATC) has taken a fresh turn, as the foreign company is now requesting an initial payment of Sh500 million and a monthly fee of Sh150 million to reactivate the 246 mast sites that were turned off seven months ago.

The outstanding debt owed by Telkom Kenya to ATC has surged from Sh4 billion in May to Sh7.1 billion by October. This amount is expected to continue growing, with interest accruing at a rate of Sh300 million per month.

Thomas Sonesson, the CEO of ATC Kenya, addressed the Senate ICT Committee and accused Telkom Kenya of breaching a contract formed in 2018. Sonesson also highlighted that the company has suspended several investments in the country due to the debt, which has hampered their ability to meet operational costs.

ATC has been paying a monthly value-added tax (VAT) of Sh50 million since January to the tax authorities due to invoices sent to Telkom Kenya that have gone unpaid.

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“We haven’t received any payments since January this year. This led to our decision to disconnect 900 out of the 1,000 leases we have with Telkom Kenya. When I sent an invoice for Sh300 million related to the lease back to Telkom Kenya, there was an additional Sh50 million in VAT that we were required to remit to the Kenya Revenue Authority,” Sonesson said.

Despite efforts spanning two years to resolve the dispute, Telkom Kenya maintains its inability to settle the debt.

The company asserts that it requires a strategic investor and government intervention to clear pending bills, thereby establishing a feasible plan to address the debt issue.

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