Tanzania: Millicom Earmarks Full Ownership Of Zantel

The international telecommunications company Millicom, operating through its Tigo brand, wants to secure full ownership of the Zanzibar Telecom (Zantel) by raising its current stake in the operator from 85% to 100%.

In an effort to achieve this, Millicom is requesting that the government of Zanzibar, via the Fair Competition Commission, releases the 15% stake it owns in Zantel to Tigo.

The Commission acknowledged that it is aware of Tigo’s request and said that it is busy investigating the intentions of both sides involved.

Millicom is also interested in taking over Telesis Tanzania, a subsidiary of Zantel that provides 4G broadband services to other telecom operators.

At the launch of Tigo’s 4G+ in Tanzania, the Chief Commercial Officer of Tigo, Tarik Boudiaf said that Tigo was competing with developed nations who were already rolling out 5G technology.
He added that the latest kind of mobile communication technology in Tanzania indicated that full possibilities of internet were now available to Tigo’s customers.

The latest market figures provided by the Tanzania Communications Regulatory Authority (TCRA) show that a merger would put the total number of Zantel’s subscribers at 13,078,154, 199,420 right behind Vodacom’s subscriber base of 13,277,574.

The total acquisition could also offer Tigo much more local control over the East African Submarine Cable System (EASSy) which is locally managed by Zantel, which is also home to the Cable's landing station.

Tigo and Zantel had already fused their mobile money services by launching a mobile money interoperability service.

Should the amalgamation between Tigo and Zantel be approved, industry experts argued that it could increase competition among operators in the country where seven players are aggressively competing for over 42 million subscribers.

The journey to the intended takeover began on 5 June 2015 when Millicom announced its 85% stake in Zantel from the Etisalat Group.
According to the contract, Millicom paid a cash consideration of US$1 and took over total debt obligations of $74 million. Zantel had almost US$32-million in net liabilities at closing.

Following this, Millicom arranged for the provision of a 5-year credit facility of US$100-million for Zantel.
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