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Vodacom and Tigo battle for Zantel stake [Citizen, The (Tanzania)](Citizen, The (Tanzania) Via Acquire Media NewsEdge) Dar es Salaam. Two mobile operators, Vodacom and Millicom International Cellular that trades as Tigo, are competing for a 65 per cent Etisalat stake in Zanzibar Telecom (Zantel) as competition stiffens in the country. The Emirates Telecommunications Corporation is working with Deutsche Bank AG on the sale of its 65 per cent stake in Zantel which has attracted interest from Vodacom Group Ltd and may also draw Millicom International Cellular, Bloomberg reported. Whoever wins a stake in Zantel between Vodacom and Tigo, will automatically become the market leader in terms of data communication. This is because Zantel is the local host of the East African Submarine Cable System (EASSy) – with the project's landing station being at the firm's (Zantel's) Head Offices at Zantel Park Drive – in Msasani. Zantel, along with Tanzania Telecommunications Company Limited (TTCL), are the local shareholders in the EASSy – an undersea fibre optic cable that links the countries of East Africa to the rest of the world. It is thus Zantel and TTCL that are responsible for selling and distributing capacity to other network operators and Internet Service Providers (ISP's). The cable also interconnects with domestic and international networks. In the same vein, whoever buys a controlling stake in Zantel will get an additional seven per cent market share of the country's telecommunication subscription rates, according to latest figures by Tanzania Communications Regulatory Authority (TCRA). Should the six per cent fall in the hands of Tigo, it will set a cut-throat competition among three major operators – where each will be controlling a market share of slightly over 30 per cent. According to TCRA's March 2014 subscription market share report, Zantel had a six per cent share while Vodacom was leading the telecoms subscription with a 37 per cent market shareholding. Airtel had a 33 per cent share while Tigo had 24 per cent. If Tigo buys Zantel therefore, the market will have three giant contenders – owning 37, 33 and 30 per cent for Vodacom, Airtel and Tigo respectively. Both Vodacom Tanzania and Zantel declined to comment anything on the matter and directed all queries to their respective shareholders. Meeco International of Tanzania owns 17 per cent of Zantel and the government of Zanzibar holds 18 per cent, according to the phone company's website. About 57 per cent of people in Tanzania had wireless access in 2012, compared with a rate of more than 71 per cent in neighbouring Kenya and 131 per cent in South Africa. Zantel had sales of about $85 million last year, according to an Etisalat document published in May. The unit was in a default for non-payment of a $96 million bank facility, with the lender saying it may take enforcement action against Zantel unless a payment is made. "Zantel cannot comment on shareholders' related matter…please refer all your queries to Etisalat group's corporate communication," said Awaichi Mawalla, Zantel marketing communications manager in a text message. Another challenging factor about the acquisition is the fact that Zantel, Tigo and Airtel recently announced a partnership in mobile money transfers. The three agreed to allow their customers in Tanzania to send money to each other using Tigo Pesa, Airtel Money or EzyPesa on their mobile handsets. Vodacom's M-Pesa was not included but it denied the claims that it was being sidelined for competition. On the other hand, Vodacom and Zantel have a partnership in the usage of network towers – with the latter using the former's towers in some parts of Tanzania Mainland. Vodacom is Tanzania's largest wireless carrier with 10.6 million subscribers, while Zantel is the fourth-biggest with 1.7 million as of June, according to the regulator. Vodacom, 65 per cent owned by Newbury, England-based Vodafone Group Plc, is also South Africa's largest wireless carrier by subscribers. Luxembourg-based Millicom provides phone services in Africa and Latin America. African carriers are trying to boost data usage in a continent where smartphones are prohibitively expensive, fixed-line infrastructure is scarce and revenue from wireless calls is slowing in the most developed markets. Tanzania has 27.94 million telecom subscribers by June 2014 from all the six operators including Benson and the TTCL, according to TCRA. (c) 2014 Mwananchi Communications . All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info). |