(Ecofin Agency) - The legal battle that has pitted Kenya’s telecom regulator against Airtel for the past seven years is being resolved. Both parties have reached an amicable settlement.

Airtel Kenya has agreed to pay the $17.6 million demanded by the Communications Authority of Kenya (CA) to renew the company’s telecom license. When its license expired nearly seven years ago, the subsidiary of the Indian group Bharti Airtel had switched to the license of YuMobile, a telecom operator it bought from Essar Telecom and whose license expires in 2025. The move was denounced by CA, which opened legal proceedings against Airtel Kenya.

"We have had this long-standing dispute with Airtel over the Essar transaction. The dispute has been there for seven years. But I am glad to report that we struck a deal and this is a major achievement for us," CA MD Ezra Chiloba said in an interview with local media.

Airtel Kenya was due to make the first payment last week so that the telecom regulator ends the legal proceedings. The second payment is expected to be made before 2024, the deadline by which Airtel Kenya must complete the divestment of 30% of its equity to local investors per the new telecoms licensing requirements unveiled in April 2021 by Joe Mucheru, the cabinet secretary for the ICT Ministry.

Before the new regulations, telecom operators were required to open 20% of their capital to local investors. Airtel Kenya, which had enjoyed an exemption since 2013, is now included.

The company is required to comply from now on or face sanctions. Airtel Kenya has long complained about Safaricom's overwhelming competition and is again applying for an exemption. However, the telecom regulator has made potential approval of the application contingent on the payment of the $17.6 million.

The lack of a court ruling on Airtel Kenya's use of YuMobile's license has always prevented the telecom regulator from forcing the telecom company to pay. The court has never defined whether Airtel Kenya was in breach or not.

Isaac K. Kassouwi