American Towers Corporation (ATC) has escalated its dispute with Telkom Kenya by demanding a down payment of Sh500 million and Sh150 million per month to reinstate services at the 246 mast sites that were switched off seven months ago.

The debt owed by Telkom Kenya has surged from Sh4 billion in May to a staggering Sh7.1 billion as of October, with interest accruing at the rate of Sh300 million per month.

ATC Kenya's Chief Executive, Thomas Sonesson, testified before the Senate ICT Committee, accusing Telkom Kenya of breaching a contract forged in 2018.

Sonesson lamented the adverse impact on ATC's operations in the country, revealing the company's inability to fulfil obligations, including meeting operating costs and pursuing planned investments.

“We have not been paid since January this year. This led to the event we decided to disconnect 900 out of the 1,000 leases that we have with Telkom Kenya. When I sent an invoice of Sh300 million linked to the leaseback to Telkom Kenya, there is a Sh50 million VAT that we are required to pay to Kenya Revenue Authority,” Sonesson stated.

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"It is a cash out for us that we are not getting paid, but we are paying the VAT," he emphasized.

ATC Kenya's decision to disconnect the leases has resulted in a halt to investments in the country, with the company paying a monthly value-added tax (VAT) of Sh50 million since January due to unpaid invoices sent to Telkom Kenya.

Despite ongoing efforts to resolve the dispute over the past two years, Telkom Kenya contends that it is unable to settle the debt without the intervention of a strategic investor and the clearance of pending bills by the government.

The mounting financial strain on both companies underscores the urgency of finding a resolution to the protracted dispute that has not only impacted their financial health but also disrupted critical telecommunication services in the region.