Wednesday , January 16 2019 7:43 am
Home / Business / Biggest telecom merger in the offing as Airtel engages tiGO for a deal

Biggest telecom merger in the offing as Airtel engages tiGO for a deal

The country’s telecommunications sector is set to witness a major transformation as owners of two of the major players in the industry are set to merge. Bharti Airtel, owners of Airtel Ghana, is reportedly in talks with rival company, Millicom International Cellular, operators of tiGO in Ghana, for a possible merger in Ghana.

When consummated, the merger would see the combined entity overtaking Vodafone Ghana to become the second largest telecom operator in Ghana. Presently, South Africa-based MTN Ghana has the biggest market share in a highly competitive telecom industry dominated by multinationals.

“The two companies are in discussions for a possible joint venture wherein both companies could hold equal share,” a source who confirmed the talks to ET, a reputable Indian telecoms newspaper, said.

The paper quoted another source in that country to have said that while all consolidation possibilities were on the table, one of the options being considered was similar to what Airtel stitched together with Malaysia’s Axiata in Bangladesh.

Airtel has just concluded merging its operations with Axiata in the neighbouring country, under which the Indian telco owns a 25 per cent stake in the combined entity with the partner holding more than 68 per cent. While Airtel declined to comment on the talks in Ghana, Millicom, which operates under the brand of tiGO in five African markets including Ghana, didn’t respond to an email seeking comment.

Airtel Ghana contributes 6-7 per cent to Bharti Airtel’s Africa revenue, which totaled close to US$900 million for the July-September quarter. Net loss for Airtel’s Africa operations narrowed during the quarter to US$91 million from US$170 million a year earlier.

Ghana is Tigo’s second largest market by subscribers.

Industry figures

According to the September data statistics released by the industry regulator, the National Communications Authority (NCA), voice subscriber numbers had reached 37,239,720 as of the end of September this year bringing the country’s total penetration rate for the period under review to 133.35 per cent.

Of the total, MTN Ghana maintains its growth trajectory as it saw its voice subscriber figures for the period rise beyond the 18 million mark. Specifically, the company, the only to have acquired a Fourth Generation (4G) Long-Term Evolution (LTE) licence, had 18,050,144 as of the end of September. This its market share at end of the month under review at 48.47 per cent.

The second biggest telecom company, Vodafone’s mobile voice subscribers is at 8,158,527 as of the end of September. This represents a market share for September at 21.91 per cent.

tiGO, the third biggest network operator in the country, 5,402,668 as of the end of September 2016. tiGO’s market share for the month under review was 14.51 per cent.

Fourth placed Airtel’s voice subscriber’s stands at 4,697,653 as of the end of September. This puts its total market share at 12.61 per cent.

Glo’s voice subscribers is at 828,162 as of the end of September. The company’s total market share for the month under review was at 2.22 per cent.

Expresso voice subscribers is at 102,566 as of the end of September 2016. This represents a market share of 0.28 per cent.

Merger comments

Airtel chairman Sunil Bharti Mittal has said previously that the telco was considering mergers or stake sales of some of its African assets, especially in those markets where it was not in the top two positions, in an attempt to cut its US $12 billion debt pile and turn the African operations profitable.

Turning around Africa is all the more important for the company faced with severe financial pressures in its largest market of India, where it is in the midst of a cutthroat price war unleashed by the entry of Reliance Jio Infocomm.

Besides exploring consolidation possibilities in Africa where it has already sold most of its towers and operations in Burkina Faso and Sierra Leone to France’s Orange Telecom, Airtel is looking to raise funds by selling stake in its tower unit, Bharti Infratel, and via a bond issue. – Economictimes

NCA reacts

In spite of a possible merger talks ongoing in India, the industry regulator in Ghana, National Communications Authority (NCA) claims it is unaware of the deal.

“We have not been informed about the supposed merger between the companies that is Airtel and tiGO”, Mr William Tevie, Director-General of NCA told the Graphic Business on Monday, June 23.

According to him, much as the companies involved can hold initial talks because they are multinationals, the entire deal will have to be consummated here in Ghana to give it legal backing.

“Should such a move come to our attention, we will have to subject it to a thorough assessment at the management level and then at the board before we approve or otherwise”, Mr Tevie said but added that “for now we have not received anything and therefore, we cannot say much.


Source: Graphiconline

Check Also

Menzgold finally pays customers

After a somewhat ‘protracted’ disagreement between embattled gold collectibles dealership firm, Menzgold Ghana Limited and …

Government readies for first tranche of Sinohydro deal

The Minister of Information, Kojo Oppong Nkrumah, has indicated that Ghana is ready to access …

Pure Water Producers call emergency meeting ahead of price increment

The Greater Accra Pure Water Producers Association has called an emergency Pure Water Producers meeting …

Leave Your Comment

%d bloggers like this: