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Tanzania: Millicom targets full ownership of Zantel

Tanzania , 18 Jan 2019

Tanzania: Millicom targets full ownership of Zantel

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

In order to achieve this, Millicom is asking the government of Zanzibar, via the Fair Competition Commission, to release the 15% stake it owns in the operator to Tigo.

Confirming Tigo's request, the Commission said it is investigating the intentions of both parties.

Millicom is also interested in acquiring Telesis Tanzania, Zantel's subsidiary that is providing 4G broadband services to telecom operators.

"We are now competing with the developed nations who are currently rolling out 5G technology. The latest generation of mobile communication technology in Tanzania denotes that full possibilities of internet are now opened to our customers," said Tarik Boudiaf, Tigo's Chief Commercial Officer at the launch of Tigo's 4G+ in Tanzania.

According to the latest market figures from the Tanzania Communications Regulatory Authority (TCRA) a merger would put the total number of subscribers at 13,078,154, 199,420 behind Vodacom with its subscriber base of 13,277,574.

The complete acquisition could also give Tigo greater local control over the East African Submarine Cable System (EASSy) which is locally hosted by Zantel, which also houses the Cable's landing station.

Zantel and Tigo had already integrated their mobile money services by introducing mobile money interoperability service.

Should the merger between Zantel and Tigo be approved, industry experts argued it could heighten competition among operators in the country where seven players are competing for approximately 42 million subscribers.

The journey to the proposed takeover began on 5 June 2015 when Millicom officially announced its 85% stake in Zantel from Etisalat Group.

According to the terms of the agreement, Millicom paid the total cash consideration of US$1 and assumed total debt obligations of $74 million. Zantel had up to US$32-million in net liabilities at closing. Subsequently, Millicom arranged the provision of a US$100-million 5-year credit facility for Zantel.

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