Airtel Kenya, a subsidiary of India’s Bharti Airtel, has been granted a two-year extension on its operating license from January 2025 despite owing KES 1.7 billion in unpaid fees on its current license.
This decision marks a significant easing in tensions between Airtel Kenya and the Communications Authority of Kenya (CA), with whom the telecom provider has had ongoing licensing disputes.
The announcement of the extension was made public through Airtel Africa Plc’s financial statements for the six months ending September 30.
According to these disclosures, the CA officially notified Airtel Kenya of the extension on September 6. This early renewal of its license was achieved following a seven-year legal battle with the government that concluded in an out-of-court settlement.
“Airtel Kenya has received confirmation from the regulator on extension of existing Network Facility Provider, Application Service Provider, Content Service Provider, and International Gateway Station and Service license as well as its spectrum in 900 MHz, 1800 MHz, and 2100 MHz that were due for renewal in January 2025 for a period of 24 months effective January 2025,” read the report.
Longstanding Dispute Over Licensing Fees
Airtel’s licensing issues date back to February 2015, when its original license expired. In February 2022, the company reached a settlement with the CA, agreeing to pay a total of KES 2.3 billion for a renewed license covering operations from 2015 to 2025.
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As part of this settlement, Airtel paid an initial KES 581 million but has yet to complete the balance of KES 1.7 billion. According to sources within the CA, Airtel Kenya is expected to settle this outstanding amount by December 2024.
For years, Airtel Kenya has contended that the CA should recognize its purchase of a license from Essar’s yuMobile in 2014, which it acquired for KES 752 million.
Airtel argues that the CA initially agreed to merge this license with its own but later demanded an additional KES 2.15 billion as a separate spectrum fee for permit renewal. This disagreement led to an extended legal dispute that ultimately concluded with an out-of-court resolution.
Airtel’s Market Position and Future Investment Plans
With a 27.2% share of Kenya’s telecommunications market, Airtel Kenya ranks as the second-largest provider after Safaricom Plc, serving approximately 16.2 million of the country’s 59.8 million mobile subscribers. The company has faced challenges in its bid to compete with Safaricom, the dominant market player.
In May 2024, the International Finance Corporation (IFC), a branch of the World Bank, revealed its intent to invest $165 million in Airtel Africa, which includes funding for operations in Kenya, Rwanda, and the Democratic Republic of Congo (DRC).
This planned investment aims to support Airtel’s regional operations and refinance existing debt. The IFC investment includes a $22.27 billion debt from its own funds and an additional $35 million from its Managed Co-Lending Portfolio Program (MCPP) for institutional investors.
Airtel Kenya’s licensing extension provides the company with more time to secure its position in the market and fulfill its obligations to the CA, underscoring the broader efforts of Airtel Africa to fortify its market presence across East and Central Africa.
