Kenya’s incumbent PTO Telkom Kenya looks set to be heading for the courts after refusing to pay a KES12.9 million (EUR155,800) advertising debt it allegedly owes to US-based AOL Time Warner. State-owned Telkom Kenya is denying that it ever brokered an advertising agreement with AOL in 1999, nor did it even discuss advertising rates or prepare/approve any matter for advertising in AOL’s international magazine. The company’s statement follows a recent article in the local Financial Standard newspaper in which AOL threatened to terminate any commercial dealings with the Kenyan government if the debt was not settled. AOL has since written to the operator to say it will pursue the debt through the courts if it was not settled within seven days. However, G N Anyiko, Telkom’s Manager for International Relations has come out fighting saying that as ‘no order was signed on behalf of Telkom’ the company was under no obligation to commit resources to such unplanned projects.
The relationship between the two has soured to the point that Telkom’s management has now accused AOL Time Warner – the world’s largest media conglomerate – of unilaterally making the decision to advertise in collaboration with its local representative although no order was signed on behalf of the company. At the heart of the issue is Telkom’s contention that whilst in 1997 its predecessor, the Kenya Posts and Telecommunications Company (KPTC), agreed to pay for a feature covering economic activities in Kenya, it declined to participate in the subsequent follow-up campaign that appeared in September 1999 and did not complete a questionnaire granting support to the project. However, AOL’s local legal representatives maintain that Telkom, which emerged from the splitting of KPTC in June 1999, agreed to pay for two and a half pages of promotional messages appeared in a supplement for the East African Community magazine at a cost of KES12.9 million, but later reneged on the deal.