Operator group Etisalat is considering the sale of its operations in Tanzania in East Africa, according to a Reuters report.
Sources said the Middle East-based company is exploring the sale of its 65 per cent stake in Zanzibar Telecom (Zantel) with the help of Deutsche Bank.
Etisalat’s operations in Tanzania have apparently drawn interest from South Africa-based Vodacom Group, with Millicom seen as another potential buyer. Both companies have a presence in the east African country.
Zantel is a relatively minor player in Tanzania, but rival operators could benefit from acquiring control of the company due to its spectrum holding.
At the end of the second quarter, Zantel had 1.7 million connections, according to GSMA Intelligence figures, putting it in fourth place. Market leader Vodacom had 10.6 million connections, followed by Bharti Airtel on 9.2 million and Millicom’s Tigo, which had 6.6 million.
The rest of Zantel is owned by Tanzania investment company Meeco International, which has a 17 per cent stake, and the government of semi-autonomous Zanzibar, which has an 18 per cent stake.
An Etisalat document seen by Bloomberg shows that Zantel generated sales of $85 million last year but is in default for non-payment of a $96 million bank facility, with the lender saying it will take enforcement action unless it receives payment.
Vodacom is 65 per cent owned by Vodafone Group and is South Africa’s largest operator, with operations across the rest of Africa.
Luxemburg-based Millicom has operations in Africa and Latin America, and recently stated its goal of generating $9 billion in sales by 2017, spurred on by digital growth.
Earlier this month Millicom claimed a world first in Tanzania after launching a mobile money service offering users the opportunity to automatically earn a return on their balance direct to their wallet without the need for a separate registration.
Etisalat secured a controlling stake in Maroc Telecom earlier this year. The deal saw Etisalat reorganise its assets by selling its operations in French-speaking West Africa to Maroc Telecom.