Etisalat said to be considering Zantel exit

Etisalat is considering the sale of its operations in Tanzania, according to a Reuters report.

Sources said Etisalat is exploring the sale of its 65 per cent stake in Zanzibar Telecom (Zantel) with the help of Deutsche Bank.

Etisalat’s operations in Tanzania have apparently drawn interest from Vodacom Group, with Millicom seen as another potential buyer. Both companies have a presence in the East African country.

Zantel is a relatively minor player in Tanzania, but rival operators could benefit from acquiring control of the company due to its spectrum holding.

At the end of the second quarter, Zantel counted 1.7 million connections, placing it fourth in the market. Market leader Vodacom had 10.6 million connections, followed by Bharti Airtel with 9.2 million and Millicom’s Tigo, which had 6.6 million.

The rest of Zantel is owned by Tanzania investment company Meeco International, which has a 17 per cent stake, and the government of semi-autonomous Zanzibar, which has an 18 per cent stake.

Zantel generated sales of US$85 million in 2013 but is in default for non-payment of a US$96 million bank facility, with the lender saying it will take enforcement action unless it receives payment.

Earlier this month Millicom claimed a world first in Tanzania after launching a mobile money service offering users the opportunity to automatically earn a return on their balance direct to their wallet without the need for a separate registration.