American Tower Corporation Kenya (ATC Kenya) is demanding a down payment of KES500 million ($3.26m) and KES150m ($978k) per month from Telkom Kenya to turn back on mast sites it switched off earlier this year.
Business Daily Africa reports that ATC Kenya switched off 246 mast sites seven months ago, and is yet to switch them back on.
The companies have been locked in a dispute for the last two years, with ATC Kenya accusing Telkom of failing to pay site leasing fees.
BDA reports that the debt owed by Telkom has risen from KES4 billion ($26m) in May to KES7.1bn ($46.2m) as of October, while it's expected to grow further as the debt accrues interest at the rate of KES300m ($1.9m) per month. The publication notes that Telkom has said it's not able to pay the debts.
ATC Kenya chief executive Thomas Sonesson told the Senate ICT Committee that Telkom had breached a contract that it had signed in 2018.
In that year, ATC Kenya agreed on lease and service terms with Telkom, acquiring 723 towers from the operator in the process. ATC Kenya had a total of 3,643 towers in the country, as of June.
However, ATC Kenya claims Telkom has since breached the terms of the agreement, forcing the tower company to cut off the power supply at 896 sites earlier this summer, leading to service outages on Telkom's network.
Sonesson said that ATC has put several investments in the country on hold due to the debt.
“We have not been paid since January this year," Sonesson told the Senate.
"This led to the event [where] we decided to disconnect 900 out of the 1,000 leases that we have with Telkom Kenya. When I sent an invoice of KES300 million linked to the leaseback to Telkom Kenya, there is a KES50 million VAT that we are required to pay to Kenya Revenue Authority. It is a cash out for us that we are not getting paid but we are paying the VAT.”
This dispute isn't the only one that ATC has been locked in. Earlier this year Ugandan mobile operator Smile said ATC caused a 15-month service outage by illegally disconnecting its network.
The operator, which provides 4G and LTE services in the country, apologized to its customers for the outage, which has been ongoing since January 31, 2022, while blaming ATC in the process.
ATC hit back at the claims, and threatened Smile with legal action in response.