Home Technology Tanzania government ups stake in mobile operator Airtel.

Tanzania government ups stake in mobile operator Airtel.

by Tullah Stephen

The government of Tanzania will now hold 49 per cent of the mobile operator. This follows a long-held row over ownership of the Tanzanian mobile operator.

After successful negotiations, Bharti Airtel agreed to sell some of the shares in its Tanzanian business to the government of Tanzania. In the deal, the government upped its ownership from 40 to 49 per cent with the Indian group Bharti Airtel ceding its shares from 60 to 51 per cent. The announcement is said to be in a bid to settle an ownership dispute and pave the way for a potential merger with Telkom Kenya.

“We have in principle agreed to move forward with a new arrangement of the shareholding of 51:49, where Airtel will now drop from 60 per cent to 51 per cent and the people of Tanzania through the ownership of the government of Tanzania will own 49 per cent.” Said Sunil Mittal Bharti Airtel chairman in an interview with Reuters.

According to President John Magufuli, in addition to giving the government more shares, Bharti Airtel had agreed to pay dividends to the state. “It’s great that they have agreed to give dividends to the government, which for eight to 10 years we had not received. The percentage of dividends is still under discussion,” the president said.

In 2017, a row emerged between the government and Bharti Airtel with the Tanzanian president John Magufuli noting that the state-run Tanzania Telecommunications Company Ltd (TTCL) owned the local subsidiary of the telco outright but it had been cheated out of shares. Bharti disputed the claims saying that it had followed all the necessary procedures and that it owned 60 per cent of the business.

Analyst see the arrangement as the key stimulant in Airtel’s interest in Telkom Kenya. In June last year, Bharti Airtel mooted plans to merge with Telkom Kenya. However, the plans hit a snag after the two parties disagreed on investment plans.  Reuters report that the deal could be back on the tables with Helios investment looking to shift some of its stakes to Telkom Kenya.

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