Airtel pumps Sh4.7b into 4G network expansion, eyes 5G

An Airtel Shop along Koinange Street in Nairobi. [Boniface Okendo, Standard]

Mobile network operator Airtel Kenya has invested Sh4.7 billion in acquiring additional spectrum as it seeks to deepen its 4G network across the country and roll out 5G in coming years.

 Airtel Africa said in a statement yesterday that the 60MHz licence in the 2600 MHz band issued by the Communication Authority of Kenya (CA) is valid from July 2022 to the year 2037.

“This additional spectrum will support our 4G network capacity expansion in the market for both mobile data and fixed wireless home broadband capability, and will allow for future 5G rollout, providing significant capacity to accommodate our continued strong data growth in the country,” the firm said in a statement.

“This investment reflects our continued confidence in the opportunity inherent in the Kenya market, supporting the local communities and economies through furthering digital inclusion and connectivity,” said the company.

The investment, in the additional spectrum, is the latest in recent months as the country’s second-largest telco seeks to up its data offering and grow its customer base in the competitive sector.

Data from industry regulator CA indicates that Airtel Kenya currently has 16.7 million subscribers as of March this year, translating to a 25 per cent market share, behind industry leader Safaricom which owns a 65 per cent market share.

The spectrum acquisition also comes a few months after Airtel Kenya and the CA struck an agreement for the settlement of a disputed Sh2.2 billion spectrum payment arising from the company’s 2014 acquisition of Essar’s Yu Mobile.

The licence was supposed to lapse in 2025 and Airtel Kenya agreed to pay $20 million (Sh2.36 billion) in four instalments over the next three years.

In 2016, the National Treasury, through the CA,  demanded that Airtel Kenya pays Sh2.26 billion in licence fees, following its 2014 deal to acquire Essar’s yuMobile together with Safaricom.

The deal was valued at about $100 million (Sh11.3 billion then) and saw Airtel acquire the 2.7 million yuMobile subscribers for $6.9 million (Sh779 million) while Safaricom took up the frequency and phone masts.

Airtel Kenya disputed the award stating that the CA had in a letter promised to merge its operating licence with that of the defunct Yu-Mobile, thereby granting Airtel the lease to operate in the country until January 2025.

In an about-turn, however, the CA demanded that the telco settles the Sh2.2 billion fee stating that only the National Treasury had the power to grant licence fee waivers.

Airtel Kenya later moved to court and in December 2017, the High Court ruled in the telco’s favour, arguing that the National Treasury erred in demanding Airtel pay Sh2.2 billion despite an existing agreement between the telco and CA.