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Millicom and Vodacom linked to Zantel acquisition

Middle Eastern operator group Etisalat could be planning a sale of its Tanzanian business, according to reports.

The group holds a 65% stake in Zantel (Zanzibar Telecom) in conjunction with Deutsche Bank, which has reportedly attracted the interest of South Africa’s Vodacom as well as pan-African operator Millicom. Both countries already have operations in the East African country.

Zantel has a somewhat small share of the market in Tanzania, with 1.7 million connections putting it in fourth place. However, it has a significant spectrum holding that makes it an attractive target for acquisition by a rival. Vodacom leads the market with 10.6 million connections, followed by Bharti Airtel’s 9.2 million and Tigo (Millicom’s operating unit) with 6.6 million.

The other shareholders in Zantel are the Tanzanian investment firm Meeco International (17%) and the government of the semi-autonomous region of Zanzibar (18%). While Zantel generated revenue of $85 million last year, it has defaulted on a $96 million loan and has been threatened with legal action unless the creditor is paid.

South African market leader Vodacom is 65% owned by Vodafone Group, and provides services in several countries across the continent. Millicom meanwhile is headquartered in Luxembourg and offers services across Africa and Latin America.

Millicom recently launched a pioneering mobile wallet service in Tanzania which offers customers direct interest return to their accounts with the need for a separate registration.

 

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