The Tanzanian government is to team up with pan-African mobile operator Celtel International to spearhead a major initiative to improve telecoms infrastructure in the country through a USD53 million investment programme. Under the terms of the deal the roles of Tanzania Telecommunications Company (TTCL) and Celtel Tanzania will be redefined: the companies will be independent entities with TTCL focusing on providing modern backbone infrastructure and broadband solutions, and Celtel focusing on driving mobile operations. The state and Celtel International will maintain their current shareholding structure in TTCL, at 65% and 35% respectively, but will spin off Celtel Tanzania from TTCL. The government will sell its 25% stake in the cellco to Celtel International for USD28 million, resulting in the state holding 40% in the new mobile operator and Celtel International the remainder. The initiative also includes measures to strengthen both companies’ financial situation, enabling TTCL and Celtel Tanzania to have about USD95 million to invest in their networks in 2005.