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Safaricom Likely to Write Off Ksh1.5 Billion Airtel, Telkom Debt

Peter Ndegwa
Safaricom CEO Peter Ndegwa. [PHOTO/ COURTESY]

Airtel Kenya and Telkom Kenya could breathe a sigh of relief even as giant telco Safaricom mulls writing off a Ksh1.5 billion debt owed by the two.

Safaricom has already made provisions for the loss of the funds, according to reports.

The money was accrued after Airtel and Telkom used Safaricom’s infrastructure for cross-network calls. The infrastructure is known as co-location and interconnection.

“On expected loss, yes, I think we spoke about this in H1 as well we did see the accumulation of losses from Telkom Kenya, and overall co-location and interconnect all put together is the amount of about Ksh1.5 billion, so that’s the major chunk of the increase in expected loss you may have seen compared to last year,” said Safaricom Chief Finance Officer Dilip Pal.

Read: Airtel, Telkom Now Want CAK Merger Conditions Reviewed

Airtel and Telkom owed Safaricom Ksh390.7 million and Ksh906.6 million respectively for interconnection, co-location and fibre  services.

The projected loss for Safaricom as a result of interconnection fees is Ksh664 million, while the remaining loss is from co-location fees.

In the year to March 2020, Safaricom earned Ksh4.9 billion from interconnection fees compared to Ksh4.6 billion in the year ending March 2019.

Safaricom also earned Ksh1.8 billion from co-location fees in the year ending March 2020.

Business Daily reports that Telkom has payment plans in place while it is not clear on AIrtel’s side.

“Telkom has agreed upon payments schedule with Safaricom, that we are honouring and up to date with,” said Telkom CEO Mugo Kibati as quoted by Business Daily.

During the merger talks that collapsed last year, Safaricom wrote to the Communications Authority of Kenya (CA), demanding debts amounting to over Ksh1.2 billion owe by the two telcos.

It is not clear whether Safaricom will pursue the debts through CA or the courts.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email francis@kahawatungu.com

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