Airtel Kenya emerges victorious in Kshs 2 billion license fees row with CA

(TOP: Airtel Kenya CEO, Prasanta Das Sarma engages with a group of boda boda operators during the launch of Tubonge earlier in mid this year).

Airtel Kenya has marked a major legal milestone against industry regulator Communications Authority of Kenya (CA) after the High Court stopped the government body from demanding Kshs 2.06 billion in licence renewal fees from the telco.

In the ruling delivered on Monday December 18, 2017 in Nairobi, High Court judge George Odunga also stopped the CA from enforcing a decision it made and communicated to Airtel demanding US $20.025 million (Kshs 2.06 billion) from the Bharti subsidiary as a precondition to the issuance of Airtel’s radio frequency spectrum and operating licences.

(TOP: Prasanta Das Sarma, the Airtel Kenya CEO – in red t-shirt- engages with a group of boda boda operators during the launch of Tubonge earlier in mid this year).

“An order is hereby issued quashing the CA’s decision contained in the letter dated June 23, and July 25, 2017 demanding the sum of $20.025 million (Sh2.06 billion) from Airtel as alleged radio frequency spectrum fees within 14 days from the date of receipt,” Justice Odunga said.

Airtel Kenya, through its lawyer Fred Ngatia, had accused the CA of dishonouring the agreement that led to its purchase of Yu Mobile, when it demanded the Kshs 2.06 billion in spectrum fees after the acquisition.

Airtel said the CA had agreed to merge its operating licences with the ones it purchased from Yu Mobile in 2014 for the US $6.976 million (Kshs 718 million) it paid to acquire the firm. The licence was therefore supposed to expire on January 27, 2025, almost 8 years from now.

Airtel’s claims that upon its purchase of Yu Mobile spectrum and frequencies, the CA changed its earlier position and demanded an additional Kshs 2.06 billion as a condition for renewing its operating permits.

Airtel had told the court that it would have abandoned the Yu Mobile deal had the regulator disclosed it would demand separate spectrum fees of Kshs 2 billion.

According to Business Daily, Justice Odunga held that protection of legitimate expectation is anchored in law and that CA, being a public body, abused its powers by reneging on its earlier agreement with Airtel without informing the firm. As a pubic body, the CA ought to have acted fairly and objectively, he said.

“It was wrong for CA to make an about-turn from its earlier decision without informing Airtel. The court has to frown from that action,” Justice Odunga said, adding that CA is thus compelled to complete the negotiations aimed at renewing the license being sought by Airtel.

Judge Odunga also ruled that a public body has to act reasonably and in good faith, and “where the public body fails to act objectively, and in compliance with the law, where it exercises its discretion irrationally and unreasonably, the court is entitled to interfere with such a decision.”

Welcoming the development, Airtel Kenya stated that as a “responsible and law abiding company,” it has “always maintained its full faith in the judicial process of the country.”

“With today’s ruling, we feel that our original stand has been acknowledged by the Honorable High Court and that principally, we have acted within the afforded legal boundaries and applicable provisions of the Kenya Information and Communications Act. Airtel Kenya, along with its customers and shareholders welcome the ruling which not only protects our rights as a business entity but also comforts the trust placed by millions of Kenyan customers on our network,” said the telco in statement, adding that: “The ruling provides a major boost to the industry as a whole and sends the right signals to international investors.”

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