The Tanzanian government has agreed to buy back a 35 per cent stake in Tanzania Telecommunications Corp (TTCL) from Bharti Airtel for TZS14.6 billion ($7 million), with a senior government official confirming the state is now set to “regain sole ownership of the company”.
The Economic Times reports that January Makamba, deputy minister for communication, science and technology, told parliament late yesterday that legal procedures “are now being finalised for the government to buy back Airtel’s shares in TTCL”.
The government is reportedly keen to recapitalise the cash strapped operator, which is minority owned by Bharti Airtel Tanzania, “in order to rescue the company”, Makamba is also quoted to have said.
Airtel’s Tanzanian subsidiary was first established when the Indian operator acquired Zain’s African assets in 2010 for approximately $10.7 billion. The deal with Zain came with a 35 per cent stake in TTCL, which the government originally sold in 2001.
Both parties have been in talks over a deal for the past five years, but negotiations have stalled because of price.
Bharti Airtel Tanzania is the second largest mobile operator in the country – also 40 per cent owned by the government – and trails only behind Vodacom Tanzania, part of South Africa’s Vodacom group in terms of market share.
As East Africa’s second biggest economy, Tanzania has a highly competitive telecoms market with seven active operators.
According to GSMA Intelligence, by the end of the year TTCL will have approximately 232,000 connections, from a total of 36 million forecast for the entire country.