Persistent rumours and anxiety that telecom giants Airtel is exiting several local markets on the continent will have to lie low for a while after Airtel Rwanda made a strong statement of intent on their future with the acquisition of 100% equity in Tigo Rwanda.
The development comes fast on the heel of rife rumours across the borders in Kenya where the telecom had to come out strongly to refute rumours that it was exiting the Kenyan market.
A fortnight ago, the chairman of the Indian-based Bharti Airtel, Sunil Mittal, told India’s Economic Times that the telecom was considering exiting Kenya, Rwanda and Tanzania and also monetising more tower assets in five non-profitable markets to reduce leverage and boost margins in Africa.
Airtel Rwanda has not been affected as it appears to have been posting better returns compared to its sister operations in Rwanda and Kenya, given its acquisition of Warid Telecom in 2013. Rwanda, Kenya and Tanzania operations have margins significantly lower compared to the current Africa average.
We should have not taken decision to venture into Africa: Sunil Mittal https://t.co/gJFf2j5QJP
— Economic Times (@EconomicTimes) December 15, 2017
Airtel Africa and SpaceX Announce Strategic Partnership to Launch Starlink Direct to Cell Connectivity Across AfricaMittal. who last week “regretted” rushed decision to venture into venture into Africa, had earlier said Bharti Airtel needed to exit the three African markets, and that it was in active discussions to explore a mix of an intra-country sale, a purchase or a merger.
Events across the South-western border country of Rwanda reveal the fruit of a purchase as it announced an agreement with Luxembourg-based Millicom International Cellular SA to take over Tigo Rwanda, the second biggest telco in Rwanda by market share. Tigo Rwanda has 3.4 million subscribers.
The acquisition of the entire Tigo Rwanda equity, according to Bharti, is aimed to consolidate the Rwandan telecom market and position Airtel as a strong number two operator in Rwanda with revenues of over $80 million and a revenue market share of over 40%.
Existing Millicom Rwanda customers will join over 370 million customers on Airtel’s global network across 17 countries and enjoy the benefits of a superior network, international roaming, and high quality 3G, 4G speed as well as Airtel Money services.
The deal indicates that Airtel will make the payment for over two years.
The company said it had participated in consolidations in the past, including the acquisition of Yu in Kenya and Milicom in Ghana, all of which “validates our stand that in-country consolidation have resulted in achieving better market positions.