Tanzanian wireless player Zantel, a unit of UAE operator Etisalat, has reportedly defaulted on a US$96m loan.
An unnamed bank is therefore asking Zantel to repay the amount due and has issued an acceleration notice, according to a Reuters report…
Tanzanian wireless player Zantel, a unit of UAE operator Etisalat, has reportedly defaulted on a US$96m loan.
An unnamed bank is therefore asking Zantel to repay the amount due and has issued an acceleration notice, according to a Reuters report referring to a bond prospectus for Etisalat.
The parent is expected to soon offer a €2.1bn bond to help finance its acquisition of a majority stake in Maroc Telecom.
Etisalat was not immediately available for comment.
The unit is among the smallest mobile operators in Tanzania, which is home to six such companies in total, and faces tough competition from market leaders Vodacom Tanzania, Airtel and Millicom’s Tigo.
As of December 2013, Zantel had 1.8 million subscribers down from 3 million a year before, according to the country’s regulator. This represents a 7% market share as opposed to 11% previously.
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 Tanzania, in comparison, has been faring well, adding almost 1 million subscribers in a year to reach more than 10 million customers.
Recently, South African parent Vodacom boosted its stake in the local unit from 65% to 82.2%. Justifying the move, the incumbent 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 57% mobile penetration rate as another reason for the stake increase, saying it was a high-growth market.
