Telkom settles Safaricom interconnection debt

27 Jul 2016

Telkom Kenya has settled the outstanding KES693 million (USD6.7 million) debt owed to mobile market leader Safaricom in unpaid interconnection fees, Business Daily reports, citing Safaricom’s director for corporate affairs, Steve Chege. Late last year Safaricom asked the High Court to temporarily block the sale of Orange Group’s majority stake in Telkom Kenya to UK-based, Africa-focused private equity firm Helios Investment Partners, over concerns that it would not be able to recover the funds it was owed by Telkom. In April the two operators reportedly signed an agreement leading to the eventual settlement of the interconnection debt, and in June France’s Orange Group completed the sale of its stake in Telkom Kenya to Helios, after the deal received approval from the relevant authorities. Under the terms of the transaction, Helios acquired a 60% stake in Telkom Kenya through its wholly-owned subsidiary Jamhuri Holdings Limited, while at the same time the Kenyan government increased its holding in the firm from 30% to 40%.

According to Mr Chege, Telkom still owes Safaricom a further KES76.1 million from a site and co-location contract with defunct cellco Essar. ‘The parties are in discussion as to how Telkom Kenya will repay this amount [KES76.1 million] to Safaricom. After this is done the court matter will be marked as settled,’ the executive added.

Kenya, Safaricom, Telkom Kenya