Tanzania gets additional stake in Bharti Airtel
THE TANZANIAN government has acquired an additional nine per cent stake in Airtel Tanzania, bringing its total shareholding to 49 per cent.
The announcement on Friday followed talks in Dar es Salaam between President John Magufuli and Bharti Airtel chairman Sunil Mittal to resolve a dispute over ownership of the Tanzanian mobile operator.
By September 2018, Airtel Tanzania had 10.9 million subscribers occupying 25 per cent of the overall market, right behind Tigo Tanzania with 29 per cent and nearly 12.4 million users. The leading telecom is Vodacom Tanzania Plc, with 14 million users and 33 per cent of the market.
Bharti Airtel announced a profit of $92 million from its businesses on the continent in September 2017, amid reports that it was planning to exit the East African market.
“We have finalised talks. On top of the additional shares, Bharti Airtel will also start paying dividends to the government of Tanzania, something that has not been done for the past 10 years,” President Magufuli said.
Talks started after President Magufuli’s decree to revisit the telecom’s ownership. Bharti Airtel now owns 51 per cent, down from 60 per cent, of Airtel Tanzania.
“Many ‘dirty deals’ came to our attention as we conducted a thorough investigation, which is why we will hold talks with the telecom company to ensure Tanzanians gets what is rightfully theirs,” said Phillip Mpango, the Minister for Finance and Planning.
A team led by Tanzania’s Minister for Constitutional and Legal Affairs Prof Palamagamba Kabudi worked on the possible repossession of the firm by the government after misconduct and irregularities were discovered that occurred when the state-run telecom Tanzania Telecommunication Company Ltd (TTCL) was privatised nearly 17 years ago.
At the time, Bharti Airtel traded as Celtel, which held 35 per cent shares of TTCL. After a five-year dispute, the shares were repossessed by the government of Tanzania from the business now called Airtel Tanzania. Airtel Tanzania, led by Sunil Mittal, was the result of the partial privatisation of TTCL on February 23, 2001, then trading as Celtel International. celtel was acquired by Kuwait-based Zain a few years later, and then resold to Bharti and renamed Airtel.
In August 2005, TTCL shares were transferred when the telecom, through the government and Celtel, agreed to restructure the two entities.
Under the terms of the agreement, the government owned 65 per cent of the shares and 35 per cent was owned by Celtel International. After the transfer, the government retained 40 per cent of its shares and 60 per cent was held by Celtel International.