Vodacom exploring expansion opportunities in Tanzania

16 May 2018

South Africa-based Vodacom Group is involved in talks with Tanzanian government and other cellcos regarding potential opportunities for expansion in the market, Bloomberg reports. ‘Should opportunities present themselves for in-market consolidation in Tanzania, we will have a look if the regulatory environment is favourable,’ CEO Shameel Joosub was quoted as saying, adding: ‘We’re having discussions with parties to see if there are opportunities.’ The group’s Tanzanian division completed its initial public offering (IPO) on the Dar es Salaam Stock Exchange (DSE) in H2 2017, raising a total of TZS476 billion (USD208 million).

In terms of potential takeover targets, Vodacom leads a crowded mobile market, with Bharti Airtel’s local subsidiary and Millicom International Cellular’s (MIC’s) Tigo-branded unit providing the strongest competition. According to TeleGeography’s GlobalComms Database Vodacom represented around 32.8% of the market at end-December 2017, compared to 26.9% and 26.6% claimed by Airtel and MIC, respectively. Either company could be open to a bid from Vodafone: MIC is looking to exit the African market to focus more on its Latin American operations, whilst Airtel has been consolidating its position on the continent, selling off its less-profitable subsidiaries and expanding in its more successful markets. A fourth major competitor exists in the form of Vietnamese military-backed Halotel (9.7% market share at end-2017), although considering it only entered the market in October 2015 it is unlikely to be looking for the door already. Alongside the main four, there are another four minor providers, however only one of these had a subscriber market share of more than 1.0% at end-December 2017, namely Zanzibar Telecom (Zantel), which is majority owned by MIC and operates on Zanzibar and the mainland. The remaining trio are Smart Telecom, Smile Communications and state-owned Tanzania Telecommunications Company Limited (TTCL).