Ghana Government secretly buying AirtelTigo, years after selling off Ghana Telecom to Vodafone

President Akufo-Addo Communications Minister, Ursula Owusu-Ekuful President Akufo-Addo Communications Minister, Ursula Owusu-Ekuful

Airtel Ghana, is leaving the Ghanaian telecom market, after its mother company, Bharti Airtel Limited in India approved the move at a board meeting on October 27, 2020.

Interestingly, Ghana government, which sold off Ghana Telecom to Vodafone years ago, is to take over the company, in an arrangement the Akufo-Addo government, is yet to disclose to Ghanaians, but media reports are that discussions for the transfer of AirtelTigo shares to the government of Ghana along with its customers, assets and agreed liabilities are in its advanced stages.

The company has been struggling since entering Ghanaian telecom market after purchasing Zain, which had also acquired Western Telesystems Ltd (Westel), then owned by the Ghana National Petroleum Company (GNPC).

Coincidentally, the Minister of Communications, Ursula Owusu-Ekuful, who is leading the negotiation was once Chief Executive Officer of Westel.

She couldn't do well in the midst of her outrageous salary and high allowances, she was fired, following workers' agitations.

Westel was one of the many deals brokered by Tsatsu Tsikata to plough back the profit to fund GNPC's activities.

Airtel Ghana has not been profitable since it ventured into the market a few years ago.

The merger with Tigo, did not bring the expected results either.

While many believe that the Ghanaian market is monopolized by MTN, others have said that Airtel Tigo, lacked innovation, marketing strategy and lagged behind in terms of deployment of current technology in the industry.

A letter sent to the National Stock Exchange of India and signed by Deputy Company Secretary and Compliance Officer, Rohit Krishan Puri, sighted by the B&FT, said the government of Ghana and AirtelTigo are in advanced stages of conclusion of the agreement for transfer of the latter as a going concern.

Bharti Airtel Ltd will sell 100% shares of its Ghana business for ₹184 crore to the country's government, which will acquire customers, assets and agreed liabilities, the Sunil Mittal company said in a statement on Tuesday.

The Government of Ghana and AirtelTigo, are in advance stages of conclusion of the agreement for transfer of the latter as a going concern.

"Airtel is voluntarily taking an impairment charge of ₹1,841 million (₹184 crore)," it said.

AirtelTigo is a joint venture between Airtel and Millicom International Cellular SA. India's second largest telecom operator holds a non-controlling 49.95% share in AirtelTigo.

The transfer of shares was approved by Bharti Airtel's board on Tuesday, which also cleared consolidated financial results for July-September.

Airtel Africa Plc, announced its standalone quarterly results last week.

Airtel Africa posted an 8.8% year-on-year (yoy) drop in net profit to $88 million in the quarter ended September due to higher expenses. The company had reported a net profit of $57 million in the quarter ended June.

The telco's revenue grew 14.3% yoy on a reported basis and 19.6% in constant currency, at $965 million, driven by customer base growth of 12%, both in Q2 FY21 and half-year ended September, and average revenue per user (Arpu) growth of 6.8% in constant currency in July-September.

In August, Airtel Networks Kenya Ltd, a subsidiary of Bharti Airtel's Africa unit, called off the merger with Telkom Kenya Ltd, citing challenges to secure regulatory approvals for the deal.

Airtel in February 2019, had said its Kenya unit agreed to acquire Telkom Kenya, the East African nation's smallest telecom operator, in which the state still has a 40% shareholding, after a majority stake was sold in 2007.

Airtel Africa is the holding firm for Bharti Airtel's operations in 14 countries, with Nigeria alone accounting for almost half of its earnings before interest, tax, depreciation and amortisation.

Given the multiplier impact the telecommunications sector has on the economy and various related industries, the Government of Ghana, has entered into this agreement to ensure that thousands of Ghanaian jobs are safe guarded.

It is of critical importance that the telecommunications sector remains healthy, dynamic, vibrant, and most importantly, competitive.

Bharti Airtel in 2017, merged with Millicom's Tigo in Ghana to become the country's second largest mobile operator, AirtelTigo, with the approval of the National Communications Authority (NCA).

AirtelTigo, serves around 5.1 million subscribers and offers direct and indirect employment opportunities to almost 10,000 people.

Celtel International acquired 75% of Western Telesystems Ltd (Westel) from the government of Ghana for $120 million in 2007.

Celtel was subsequently acquired by the Zain Group which also sold all its African Assets to Bharti Airtel in 2010.

The government of Ghana remained a shareholder in Airtel Ghana with a 25 percent holding through the Ghana National Petroleum Corporation, until the AirtelTigo merger, and retained an option to acquire additional shares after the merger.

Westel was at the time of the takeover by Celtel, the second national operator in Ghana and was licensed to provide fixed and mobile (GSM) telecommunications services.

Millicom Ghana Limited, was the first mobile telecommunications company to operate in the country under the brand name Mobitel before rebranding to become Tigo from Buzz.

Source: The Herald