India-based Bharti Airtel has consented to give part of its Airtel Tanzania stake to the government, raising the country’s mobile phone operator holding to 49 percent up from 40, The East African reports.
India-Tanzania Rumble Ends
After conversations in Dar es Salaam between President John Magufuli and Sunil Mittal, Bharti Airtel chairman, both parties agreed to bring an end to the long-held dispute over ownership of the Tanzanian mobile operator.
Without giving value for shares being transferred to the government, Bharti Airtel will retain 51 percent company stake, according to the president’s office. Magufuli also revealed that in 2017, state-run Tanzanian Telecommunications Company Limited (TTCL) owned the local subsidiary of Bharti Airtel outright, but had been cheated out of shares.
But Bharti Airtel has again disputed the president’s revelation, with claims that it received the entirety of required approvals from the state when it bought a 60 percent stake, having complied with government rules.
According to Magafuli, added to giving the government more shares, Bharti Airtel had agreed to pay dividends to the state, which is reported to have not been received for eight to ten years. While the dividend percentage is still under discussion, Magufuli’s ownership claim over the Tanzanian mobile company had reached the ears of foreign investors. They have been unnerved by the government’s crackdown on mining firms operating in the country.
What’s Been Going On?
In December 2017, Bharti Airtel said that there were no irregularities in deals which saw it become the majority shareholder in a Tanzanian unit. This development, which came just a day after Magafuli claimed the company belonged to his country, was being investigated by Tanzania’s finance minister. The Indian firm, having said that it had not been in the reception of any notice or communication from Tanzania, yet expressed their willingness to work closely with the government to resolve the doubts for shareholders’ satisfaction.
Bharti Airtel has acquired 60 percent shareholding from Kuwait’s Mobile Telecommunications Co., in June 2010 in full compliance with Tanzania government’s approval. It was in March 2019 that the two parties began talks on the local unit stake row.
In November, the Tanzanian government announced that it didn’t recognize the Airtel Africa IPO and the ownership of Airtel Tanzania will depend on negotiations between Bharti Airtel and the administration. Bharti Airtel was bracing to monetize its Africa business, but only to hit a speed bump as the Tanzanian government disproved the process. The difference between these two parties could have raised their investments to as much as USD 4.5 Bn even as Bharti Airtel had revealed to the government that investors such as Temasek, SoftBank, Singtel, and Warburg Pincus had pumped USD 1.25 Bn into Airtel Africa in October 2018.
Bharti Airtel Limited is a leading global telecommunications company with operations in 16 countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks amongst the top 3 mobile service providers globally in terms of subscribers. In India, the company’s product offerings include 2G, 3G, and 4G wireless services, mobile commerce, fixed line services, high-speed home broadband, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G, 4G wireless services and mobile commerce. Bharti Airtel had over 413 million customers across its operations at the end of March 2018.