Communications Ministry explains why AirtelTigo shares were acquired by govt

Wed, 28 Oct 2020 Source: www.ghanaweb.com

A statement from the Ministry of Communications has justified a transaction entered into by government to acquire the shares of AirtelTigo.

In the statement, the Communications Ministry said because of the huge impact that the telecoms sector has on the economy, it moved to clinch the deal with Bharti Airtel to protect Ghanaian jobs.

“Given the multiplier impact the telecommunications sector has on the economy and various related industries, the Government of Ghana has entered into this agreement to ensure that thousands of Ghanaian jobs are safeguarded.

“It is of critical importance that the telecommunications sector remains healthy, dynamic, vibrant, and most importantly, competitive,” parts of the statement from the Ministry read.

The statement further explained that the transaction will be soon be concluded by the execution of definitive agreements.

“The Government of Ghana through this transaction, will temporarily operate this national asset in the best interest of the nation, and ensure the protection of the interests of all employees, customers and stakeholders, and a continuation of the digital transformation in Ghana,” the statement read.

The cost of the transaction was not disclosed in the statement from the Communications Ministry but some reports say Bharti Airtel has told its shareholders that the shares were bought for about $25 million.

Important facts contained in the statement

Bharti Airtel in 2017 merged with Millicom's Tigo in Ghana to become the country's second-largest mobile operator, AirtelTigo, with the approval of The National Communications Authority.

AirtelTigo serves around 5.1 million subscribers and offers direct and indirect employment opportunities to almost 10,000 people.

Celtel International acquired 75% of Western Telesystems Ltd (Westel) from the Government of Ghana for $120 million in 2007.

Celtel was subsequently acquired by the Zain Group which also sold all its African Assets to Bharti Airtel in 2010.

The Government of Ghana remained a shareholder in Airtel Ghana with a 25% holding through the Ghana National Petroleum Corporation, until the AirtelTigo merger, and retained an option to acquire additional shares after the merger.

Westel was at the time of the takeover by Celtel, the second national operator in Ghana and was licensed to provide fixed and mobile (GSM) telecommunications services.

Millicom Ghana Limited was the first mobile telecommunications company to operate in the country under the brand name Mobitel before rebranding to become Tigo.

Source: www.ghanaweb.com