Tanzania gets ad­di­tional stake in Bharti Air­tel

The East African - - NEWS - By BEATRICE MATERU Special Cor­re­spon­dent

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.

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