The Computer Society of Kenya

Since 1986


Tuesday December 19, 2017

Telecoms operator Airtel Kenya Monday got a big boost in its battles with the regulator after the court stopped the Communications Authority of Kenya (CA) from demanding Sh2.06 billion in licence renewal fees.

High Court judge George Odunga also stopped the CA from enforcing a decision it made and communicated to Airtel demanding  $20.025 million (Sh2.06 billion) from the Indian firm as a precondition to the issuance of Airtel’s radio frequency spectrum and operating licences.

“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, through lawyer Fred Ngatia, had accused the CA of dishonouring the agreement that led to its purchase of Yu Mobile, when it demanded $20.025 million (Sh2.06 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 $6.976 million (Sh718 million) it paid to acquire the rival firm. The licence was thus supposed to expire on January 27, 2025.

Airtel’s claims that upon its purchase of Yu Mobile spectrum and frequencies, the CA changed its earlier position and demanded an additional Sh2.06 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 Sh2 billion.

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.

The judge ruled that a public body has to act reasonably and in good faith. 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.
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