Tigo on verge of Zantel acquisition
What you need to know:
Mic Tanzania writes to FCC seeking regulatory approval to acquire the entire shares of Zantel and its subsidiary
Dar es Salaam. Almost three years and six months since Millicom International Cellular (Mic) -- trading as Tigo -- acquired an 85 per cent stake in Zanzibar Telecom (Zantel) from the United Arab Emirates’ Etisalat Group, the former is now eying the entire ownership of the Isles’ based telecommunication operator.
Mic Tanzania has written to the Fair Competition Commission (FCC) requesting regulatory approvals for it to acquire the entire shares of Zantel and its (the latter’s) subsidiary, Telesis Tanzania Limited.
After Mic acquisition of Etisalat’s 85 per cent stake in Zantel, the Government of Zanzibar maintained its 15 per cent of the shares in Zantel.
Millicom pledged in 2015 that it would retain and continue to operate the Zantel brand, while delivering cash flow growth by leveraging technical and operational efficiencies.
A statement, published in some newspapers, noted yesterday that in line with the share purchase agreement, the Revolutionary Government of Zanzibar will transfer its 15 per cent stake in Zantel to pave way for Mic Tanzania Limited to own 99.9 per cent of the issued and outstanding shares of the telecommunication firm.
The transaction will also mean that Mic Tanzania will own 99 per cent of shares in Telesis Tanzania Limited, a company that deals with the provision of 4G telecommunications network capacity and coverage to telecom operators.
“FCC is currently investigating the intended acquisitions….parties (both legal and natural) who deem themselves as having sufficient interest in these mergers…..shall file and register such interest(s) or information by way of written submissions to the FCC within 14 days,” the statement reads.
The merger between Tigo and Zantel will further stiffen the competition among telecommunication players in Tanzania where seven players are scrambling for a pie of the country’s 41.8 million voice subscribers and 20.8 million mobile money users.
Going by Tanzania Communications Regulatory Authority (TCRA) figures, Zantel had a total of 1,071,586 while Tigo had 12,006,568 as of June 2018.
This suggests that a combination of the two firms will bring the total number of their subscribers to 13,078,154, being only 199,420 behind first-placed Vodacom. The latter had a total of 13,277,574 subscribers.
Tigo held a 29 per cent voice subscription market share as of June 2018 while Zantel had two per cent. A combination of the two brings their combined market share to 31 per cent, which is just one per cent behind the market leader, Vodacom.
The two firms’ mobile money platforms had a total of 7,286,907 as of June 2018. That was behind Vodacom’s M-Pesa by only 1,355,355.
Zantel is the local host of the East African Submarine Cable System (EASSy) – with the project’s landing station being at the firm’s (Zantel’s) Head Offices at Zantel Park Drive – in Msasani.
Zantel, along with Tanzania Telecommunications Company Limited (TTCL), are the local shareholders in the EASSy – an undersea fibre optic cable that links the countries of East Africa to the rest of the world.
