Inside Bharti Airtel Boss Sunil Mittal’s Mission In Tanzania, Kenya

Speculations have been nigh on India’s Bharti Airtel chairman Sunil Mittal’s mission in Kenya and Tanzania, where he held talks with the two heads of state.

In Tanzania, the chairman came to discuss a deal that would see the company list in the stock market. The deal would see Airtel Tanzania relinquish nine percent of its shares to the Tanzanian government without gaining a single shilling.

This shrunk Bharti’s shares to 51 percent while the government’s ballooned to 49 percent. In addition, the government of Tanzania will receive Tsh60 billion (Ksh2.7 billion) for five years.

Also, the government will receive Tsh2.3 billion (over Ksh1 billion) for CSR activities.

In 2016 Tanzanian President John Pombe Magufuli ordered all mobile operators to list at least 25 percent of their shares on the Dar es Salaam Stock Exchange (DSE) to boost local ownership.

Below is a tweet by Gerson Msigwa, the Director of Presidential Communication in Tanzania:-

TUMEKUBALI.
Sasa Tanzania imeongeza hisa kutoka 40% hadi 49% na Bharti Airtel imepunguza hisa kutoka 60% hadi 51% ktk umiliki wa kampuni ya Airtel Tanzania bila malipo yoyote kutoka Serikali ya Tanzania. Pia Tanzania itapata Sh.Bil 60 kwa miaka 5. Na sh.Bil 2.3 za miradi ya Jamii pic.twitter.com/c6wGJ5atgb

— Gerson Msigwa (@MsigwaGerson) January 15, 2019

The agreement is set to bring to an end a tussle that has been ensuing between Tanzania and Airtel over ownership of the company and sharing of revenues. The Tanzanian government has been claiming ownership of the company, complaining that it has not been receiving it fair share of revenues despite owning 40 per cent of the company.

Read: Bharti’s Sunil Mittal in Kenya to Oversee the Telkom and Airtel Kenya Merger

The company was started in 1998 by Tanzania Telecommunications Company Limited (TTCL) in 1998 under the Cellnet banner. Later the company would change its name to Celtel in May 2001.

The company was later sold and rebranded to Zain and later Airtel Tanzania, with the government retaining 40 percent ownership until last week.

After his trip in Tanzania, he crossed to Kenya ‘secretly’ where he met President Uhuru Kenyatta, who similarly ‘sneaked’ from Mombasa through the SGR train. The two held a closed-door meeting that whose agenda was not publicised.

However, details emerged later that the discussion entailed a merger between Airtel Kenya and the state-owned Telkom Kenya.

With the intervention of the two icon, reports emerged that the merger would be fast-tracked so that it will be concluded by March 2019.

In the merger, Helios Investment, a London based firm that owns 60 per cent stake at Telkom will relinquish 20 percent of its shareholding to enable Airtel buy out 50 percent stake.

The government, which now holds 40 percent stake at Telkom will shrink its shareholding to 10 percent.

The merger is said to be at advanced stages, with leaders in the inndustry giving the issue a wide berth.

Airtel hopes to increase its market share in East Africa. Currently, Airtel is the second largest network in Kenya with 23.3 market share.

In Tanzania, Airtel Tanzania holds 27 percent of market share behind Tigo’s 28 percent and Vodacom’s 32 percent.

Airtel hopes to ride on backing from the two governments to increase its market share especially in Kenya, where the company has been complaining of dominance by market leader Safaricom, which enjoys 64.2 percent market share.

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