Millicom International Cellular SA and Bharti Airtel parent companies of Tigo and Airtel in Ghana have officially announced their merger in Ghana.
The merger between the two will push the new entity to the number two spot of leading telecom operators in Ghana, after Vodafone which is at number two and MTN, which is the currently the biggest telecom operator in Ghana.
Under the merger the two companies will be holding an equal share in the new stake.
The transaction will however be subject to obtaining approval from relevant authorities in Ghana and the satisfaction of customary closing conditions.
The two companies commenced talks last year, which were finalized early this year – 2017.
Mohamed Dabbour, Executive Vice President, Millicom Africa in a statement on the merger said: “In a highly fragmented telecom market, this deal represents a major milestone for our business in Ghana. The combination of Tigo and Airtel will create an operator that will be ableto offer Ghanaian consumers and businesses a state of the art network with high speed mobile data coverage. This transaction underlines confidence in the Ghanaian economy, and provides the opportunity to develop nationwide digital infrastructure and services in Ghana.”
Raghunath Mandava, MD and CEO, Airtel Africa, said: “The agreement highlights our commitment to the Ghana market and our customers. The coming together of the two entities will benefit customers, who can now enjoy an extensive combined network and a wider range of affordable and innovative products and services. It will further strengthen our position in the market and offer huge benefits arising out of synergies in operations, resulting in better experience for the customers.”
Profits in the Ghana’s telecom industry has been declining for some time as a number of challenges including Ghana’s power crises, high cost of operations and low tariffs for telecom operators continue to hurt telecom operators.
Ghana has six Mobile Network Operators (MNOs), MTN, Vodafone, Tigo, Airtel, Glo and Expresso. Performance of telecom companies according to statistics from the National Communications Authority (NCA), show mobile telephone subscriptions in Ghana increased from over 36 million at the end of second quarter of 2016 to a little over 37 million at the end of third quarter of 2016, indicating 1.7% quarter-on-quarter growth rate .
At the end of the third quarter of 2016, MTN had the largest share with a total Subscription of over 18 million representing 48.5% of the total mobile market in Ghana, followed by Vodafone with subscription of a little over 8 million (21.9%), Tigo about 5.4 million subscriptions (14.5%) and Airtel 4.6 subscriptions (12.6%).
Glo and Expresso have a market share of 2.2% and 0.3% respectively.
By: Vivian Kai Lokko/citibusinessnews.com/Ghana