Tanzanian govt in talks to buy back Airtel’s 35% stake in TTCL

12 Dec 2013

The government of Tanzania has commenced negotiations with Airtel Tanzania to purchase the Indian-backed company’s 35% stake in national PTO Tanzania Telecommunication Company Limited (TTCL), in the hope that by taking 100% control of the carrier it will be able to turn it around and enable it to compete more effectively with other mobile companies in the country. The talks have begun in the wake of a directive from the Parliamentary Economic Infrastructures Committee (EIC), issued on 22 October 2013, calling on all parties involved to speed up the buyback process. Local newspaper The Guardian quotes TTCL chief executive officer Kamugisha Kazaura as saying that the two sides met last month for talks regarding the state’s intention to gain full ownership of TTCL.

‘We had talks with our fellow partner on how to buy the shares. We are still working on the financial reports which are update-audited,’ he said. The CEO also confirmed the government’s determination to buy the stake but noted that negotiations include assessing Airtel Tanzania’s economic situation before proceeding with a deal.

Last month, TeleGeography’s CommsUpdate reported that the government was moving closer to its target to secure full ownership of TTCL, with deputy minister at the Ministry for Communication, Science and Technology, January Makamba, quoted as saying that the government is intent on turning TTCL into Tanzania’s leading telecoms service provider in the near future, and ensuring it performs better in the local voice and data services market. ‘After building TTCL’s capacity, communication services, particularly mobile phones, will be available in all parts of the country including rural areas,’ the deputy minister said. Makamba’s words were echoed by Kamugisha Kazaura who confirmed at the time: ‘The focus of the company is to shift from code division multiple access (CDMA) to the global system for mobile communications (GSM) technology.’ The chief executive hopes this route will allow a smoother migration to 4G Long Term Evolution (LTE) technology in future. Around USD15.5 million will be spent initially to bolster TTCL’s network projects.

In 2012 the government kicked off its formal bid to buy back the shares that had been sold to the Dutch-based consortium MSI and DeTeCon of Germany for USD62 million in February 2001. At the time the company was operating under the name Celtel. However, the shares were sold to Zain Group of Kuwait which, in April 2010, sold them on again (along with all its operations in Africa) to India’s Bharti Airtel. At the time of the Indian deal, the Tanzanian administration tried to strike a separate deal with Zain for TTCL, but could not agree on price. Zain was demanding USD62 million for its stake, but the government was only prepared to offer USD8.7 million.

Tanzania, Airtel Tanzania, Bharti Airtel, Tanzania Telecommunication Corporation, Zain Kuwait