Essar reaches temporary settlement with KDN

26 Sep 2011

Essar Telekom Kenya has agreed to pay Kenyan Data Networks (KDN) a lump sum of KES25 million (USD250,000), followed by KES6.2 million until an independent arbitrator can settle the dispute. The disagreement is over KES133 million in unpaid fees to KDN for backhaul transmission services from the Indian-backed telco. KDN began litigation against Essar in May this year, threatening to cut off Essar’s connectivity should it continue its non-payment. In this most recent deal, Essar, which operates locally as Yu, has consented to clear the KES25 million debt incurred for services between May and August this year, and continue to pay KES6.2 million a month whilst an independent arbitrator investigates the case, provided that the Nairobi-based wholesaler does not interfere with its connectivity.

As previously reported by CommsUpdate, KDN claims to be operating at a loss as a result of Essar’s non-payment.