Dar es Salaam — Millicom International Cellular S.A. (Millicom) is selling its Tanzanian subsidiaries (Tigo and Zantel), the company announced on Monday, 19 April 2021.
The telecom firm, which is listed on Nasdaq (New York City) and Stockholm (Sweden) stock markets, said in the statement that it has already signed an agreement for the sale of its entire operations in Tanzania to a consortium led by Axian Group of Madagascar.
The sale is part of Millicom's strategy to exit Africa and focus on Latin America.
"The sale of the Tanzania business is in line with Millicom's strategy to focus on providing fixed and mobile services in Latin America after investing in the development of the telecommunications industry in Africa for more than 25 years," the statement said.
With a total of 13 million subscribers as of December 2020, Tigo held a 25 percent subscription share in a market where seven operators have issued about 51 million subscriber identification module (Sim) cards.
The company was behind market leader Vodacom, which had issued 15.6 million subscriptions (31 percent), and Airtel, which had 13.8 million (27 percent).
Zantel had one million subscribers, representing a market share of only two percent.
Tigo was, however, ahead of Airtel in terms of mobile money subscription whereby as of December, the former had nine million subscribers, representing 28 percent of the market share, while the latter had 6.5 million, equivalent to 20 percent slice of a total of 32 million subscribers.
Axian, an Antananarivo-based pan-African group, was part of the consortium that snapped up Millicom's operations in Senegal in 2018.
"We knew that asset for a while because Tanzania has huge potential," Hassanein Hiridjee, the CEO of Axian, is quoted saying by the Financial Times. "When we found that Millicom was divesting from Africa we said: 'we must go there, we must'."
With $366 million in revenues last year, Tanzania represents a meagre six per cent of Millicom's total revenue, Financial Times reported on Monday.
Africa, the Miami-based company told Financial Times, had historically generated lower returns than Latin America, where it has very profitable operations, especially in Guatemala, El Salvador, and Panama.
Millicom, via its Tigo brand, accounts for more than 52 million mobile subscribers across 11 countries in Latin America and Africa.
Yet, over the past four years, it has sold its operations in the Democratic Republic of Congo, Rwanda, Senegal, and Chad. On Friday, it agreed to transfer its stake in AirtelTigo to the government of Ghana -- where it had a joint venture with India's Airtel -- taking on a $25 million charge.
Now, the selling of Tigo in Tanzania means the emerging market telecoms will be fully exiting Africa this year.
"Millicom is a Latin American-focused telecom company with 95 per cent of our revenues coming from that region. With the announcement today of the divestiture of our remaining African businesses we draw a close on a chapter in our history and open another solely focused on the Latin American region," Mauricio Ramos, the CEO of Millicom, told the Financial Times.