Tanzania: French firm to take over Zain

FEW days after Zain had officially written to the government about its interest to withdraw its shares from Tanzania Telecommunication Company (TTCL), it has now revealed that the company will be sold to a French company, New Orange.


Last week the Minister for Communications, Science and Technology, Prof. Peter Msolla, said the government had welcomed Zain withdrawal move positively adding that both shareholders agreed on the modalities that the government should retake TTCL for 100 per cent.

Sources in the company who preferred anonymity confirmed that the company’s top management was currently engaged in final talks with the French company.

Reports from Nigeria and Cameroun showed that the Middle East and Africa mobile operator, Zain Group, agreed last week to sell its Celtel Africa unit to the French company, New Orange, in a deal of up to 12 billion US dollars (more than 13 trl/-).

But there are fears several jobs will be lost.However, the effort may run into murky waters if Econet Wireless Group which has been reported to have invoked legal conditions that would frustrate the deal, succeeds.

A spokesperson for Econet Wireless Group was quoted in a report to have said that following reports that Zain was trying to sell its African operations, its lawyers wrote to Zain officials reminding them that they could not offer for sale shares whose ownership is in dispute and subject of litigation in a number of international jurisdictions.

Econet is claiming that its pre-emption rights were breached when its predominantly Nigerian partners decided to sell their shares in Vmobile to Zain in 2006, and has taken the matter to the United Nations Commission on International Trade Law arbitration.

However, both subscribers and telecom enthusiasts hoped that the troubles were over with the network after a whopping $1.005 billion acquisition money from MTC of Kuwait in 2006, coupled with the pedigree of the company in both Middle East and Africa where it held sway.

Four years before MTC indicated interest in the then Vmobile, the company steadily grew from a one country operator in Kuwait to a multinational telecommunications operator with presence in 20 countries and total of 23 million subscribers.

In 2005, it pulled one of the largest acquisition in the Middle East and Africa, with a $3.4 billion acquisition of Celtel International, that was the leading mobile operator in Sub-Saharan Africa.

Between that 2005 and 2006 it grabbed 65 per cent of Vmobile, MTC also concluded record deals acquiring 61 per cent of Mobitel in Sudan, majority equity stake in Madacom in Madagascar as well as signing a $4 billion syndication credit facility deal, underwritten by 4 international banks to fund its expansion and corporate strategy.

With the acquisition of Vmobile, converting it to Celtel and harmonizing all its African operations to generally answer Zain in August 2008, the company now operates in 22 countries with over 15,000 employees providing a range of mobile voice and data services to over 63.5 million active subscribers and business customers.

It has presence in the 6 countries in the middle East — Bahrain, Iraq, Jordan Kuwait, Saudi Arabia, and Lebanon.

These are in addition to its presence in 16 countries in Africa, including Nigeria, Ghana, Sierra Leone, Sudan, Tanzania, Uganda, Kenya, Madagascar, Niger, Zambia, Burkina Faso, Chad, Republic of Congo, Malawi and Democratic Republic of the Congo.

Early this year, Zain, in a joint venture with Al Ajial Investment Fund acquired a 31 per cent stake in the Moroccan telecom Operator, Wana, and just recently got a nod from the extraordinary General Assembly of Palestine Telecom, Paltel, towards acquiring the Operator, Paltel.

Besides, Zain’s Africa operations have been very profitable. In the year ended December 31, 2008, Zain group posted record results, with revenue increasing by 26 per cent to reach 7.4 billion US dollars. The profits were mainly pushed by growth in Africa, where the company has the largest presence.

Commenting on the move, the Deputy Minister for Communication, Science, and Technology, Dr Maua Daftari, said she was not aware of the issue.

She added that if that was the case Zain had first to notify the government as it operates in Tanzania.

Daily News

Post published in: Economy

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