Essar, KDN agree on arrears
BUSINESS| Sept. 24, 2011, 4:12 p.m.
In a dispute over USD1.34 million in arrears, Indian-owned Essar has agreed to pay Kenya Data networks (KDN) USD253 000 upfront and installments of USD62 700 a month to clear the debt and until the dispute is fully resolved.
Failure to pay the first installment within 14 days will result in the agreement lapsing automatically.
The agreement was recorded in the Nairobi High Court this week.
The agreement relates to an outsourcing deal between Essar, owners of Yu Mobile, and KDN. In May, KDN threatened to cut services to Essar, affecting tens of thousands of consumers, unless the arrears were paid.
Essar moved for a court order blocking KDN from interfering with its infrastructure, saying thousands of customers would lose access to voice and data services.
The consent, adopted as a court order, read that KDN would not interfere with the 186 sites of interconnection to the telecommunications industry and would not switch off connectivity.
Operating under its Yu brand, Essar is the smallest mobile operator in Kenya. Despite rumours that the company wished to sell Yu and several changes in leadership, it says ti will continue operating in Kenya and expects to take another two years to break even.
KDN provides carrier services over its fibre-optic network. The company is involved in several major projects, including the greater East Africa project.
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