UAE operator Etisalat is reportedly considering selling its 65% stake in Tanzanian wireless player Zantel.
Etisalat has hired Deutsche Bank to advise it on a potential sale, and interested parties include local operators Vodacom Tanzania and…
UAE operator Etisalat is reportedly considering selling its 65% stake in Tanzanian wireless player Zantel.
Etisalat has hired Deutsche Bank to advise it on a potential sale, and interested parties include local operators Vodacom Tanzania and Millicom’s Tigo, according to a Bloomberg report citing people with knowledge of the matter.
Etisalat could not be reached before the press deadline while Millicom declined to comment. Vodacom said it is constantly looking at growth opportunities but declined to comment on any specific country or company.
Zantel is among the smallest mobile operators in Tanzania, which is home to six players in total, and faces tough competition from market leaders Vodacom, Airtel and Tigo.
As of June 2014, Zantel had 1.72 million subscribers, down from two million a year before, according to the country’s telecoms regulator. This represents a 6% market share as opposed to 7.5% previously.
In late May, the Etisalat subsidiary reportedly defaulted on a US$96m loan.
Etisalat first bought a stake in Zantel in 1999 and now owns 65%. The other shareholders are the government of Zanzibar (18%) and Meeco International Company (17%).
Vodacom, in comparison, has been faring well, adding almost one million subscribers in a year to reach more than 10 million customers.
Earlier this year, its South African parent boosted its stake in the Tanzanian unit from 65% to 82.2%. Justifying the move, Vodacom said it wanted to have more exposure to the business, which it described as its most successful investment outside of the South African operations.
Vodacom also pointed to Tanzania’s 60% mobile penetration rate as another reason for the stake increase, saying it was a high-growth market.