Home Opinions Government must sell AirtelTigo or it will collapse – Experts

Government must sell AirtelTigo or it will collapse – Experts


When government took over complete ownership of AirtelTigo last Friday, the Communication and Digitization Minister, Ursula Owusu-Ekuful assured stakeholders of efficient management of all the assets to ensure the state, customers, workers and the industry benefits from it. But every single industry expert and watcher who spoke with TechGh24 thinks the only way forward is for government to hand it over to a private investor to prevent a complete collapse.

In fact, one of the experts stated categorically that “mark my words – any other option [apart from privatization] will be another fiasco”.

He explained “another fiasco”, saying “I have always thought that the AirtelTigo merger itself was bad and if government decides to run it by itself, it will get worse.”

AirtelTigo is a merger between Airtel of the Bharti Airtel of India, and Tigo of the Millicom International Cellular of Sweden. The two formed separate holding companies for AirtelTigo; Bharti Airtel Ghana BV and MIC Africa BV. BV simply stands for Besloten Vennootschap in Dutch, which basically means limited liability.

The two companies were compelled into a merger presumably as a strategy to try and survive the increasingly competitive Ghanaian telecoms market, which has a runaway market leader, MTN, being the only profitable player, in the real sense, with everyone else playing catch up.

At the time of the merger, Tigo was the number three operator, in terms of subscriber base, and Airtel, in which government had 25% through the Ghana National Petroleum Corporation (GNPC), was number four. The two were behind Vodafone, in which government still owns 30 shares. MTN has always been number one, since forever. And Glo has been trailing since Expresso collapsed.

Prior to the merger, there were speculations French telecoms giant, Orange and Strive Masiyiwa’s Econet from Zimbabwe had showed interest in Tigo but none of that materialized. So, the merger seemed to be the only sensible thing to do.

But one of the experts who spoke with TechGh24 said he knew from day one that AirtelTigo was going nowhere, so he is not surprised at the turn of events.

The signs were always on the wall, particularly after the then Tigo boss, Roshi Motman (a Swedish), who supervised the merger, left immediately after the process was completed. Then, her successor, Mitwa Kaemba Ng’ambi, also left just after one year at AirtelTigo, and joined MTN – a move that the industry watcher described as a smart one, given what he thought about the merger.

Indeed, another expert did point out that the merger was more of a strategy to create an entity that is attractive to investors, because the two companies, on their own, did not look attractive enough, and that was why they each were not able to get a buyer even though they had been wanting to leave Ghana for many years now.

“So from the onset, the strategy has been to sell AirtelTigo,” he said.

More so, according to him, Bharti Airtel and Millicom (Tigo) have always had a strategy of going into emerging markets and getting out either after exhausting their tax holidays or when things begin to get tough. Once they see the environment getting tough, they bail out.


He explained that Millicom, for instance, which is Swedish by origin, does not even operate a telco in Europe (it’s mother continent), but they are in Africa and Latin America. Currently they have exited all of the African markets, except Tanzania, and they are concentrating heavily on Latin America where they have most probably not exhausted their tax holidays yet.

The only African country in which Tigo is thriving is Tanzania, but they have existed Senegal, DR Congo, Chad, Rwanda and now Ghana. Meanwhile, they are currently in Paraguay, El Savador, Guatemala, Colombia and Bolivia.

It is important to note, however that Tigo was the first telco to be licensed in Ghana as Mobitel. They then became Buzz before rebranding to Tigo. All this while, the holding company has been Millicom. They have been here longest, but it seems their dominance was quickly toppled by Spacefon (now MTN), many years ago when Spacefon entered the market with GSM, a digital technology, while Tigo (Mobitel) was still running ETACS, a limiting analogue network. That was the beginning of their woes; and it has lingered on till date.


According to the expert, Airtel on the other hand, never starts a telco from scratch anywhere. They often go into emerging markets and buy an existing telco, which has already done all the ground work. It bought Zain operations in at least 15 countries in Africa, including Ghana, Nigeria, Tanzania and others. And in Uganda, they bought Warid Telecoms. In Kenya, they tried a merger with Telkom, but that failed. And apart from Ghana, Airtel has so far exited Burkina Faso and Sierra Leon, but still operates in 14 other African countries.

So, to this industry person, the companies, which the Communications Minister said, have for a while now, been contemplating exiting the Ghanaian market, only merged to sell as they have both reportedly incurred huge liabilities, for which government allegedly took over their assets for a pittance.

Indeed when the merger happened, government’s 25% shares in Airtel at the time, reportedly translated into about 10% in the merged entity, AirtelTigo. But like with Vodafone, government never makes its share of investments into any of these telcos. It only sits and waits for dividends.

Government an operator?

Another expert said “government can simply not run AirtelTigo. They should just walk away and allow a private investor to do the job.”

He thinks government can at least give out 70% to a strategic investor so that investor can assume operational responsibilities of the company, instead of government keeping it and using it for all the stuff the Minister talked about.

“We should no longer have government as a player in the telecoms space – we have outgrown that stage – we need to get away from that fast and government would be expected to make that happen sooner than later,” he said.

Another industry watcher said government had earlier hinted it will run the company for between 18 to 24 months while looking for a strategic investor, and he hopes government will keep to its word.

One expert estimates the value of AirtelTigo at US$200 million, while another one thinks it is much less, particularly with an estimated US$100 million worth of liabilities (unconfirmed).

Indeed, the Minister has just recently said that all of the loans of the company have either been written off or slashed down significantly by their creditors, so what is left is manageable, and government would ensure that the company fulfills its obligations to the respective creditors. This is good news, but the experts think it does not in anyway mean government can successfully operate AirtelTigo.

In fact, one expert fears the company might be used to abuse the privacy of Ghanaians if it is left in the hands of government. His argument was that, for this brief period that the company has been in the hands of government, during the period of the 2020 elections, the ruling party in particular, kept sending unwanted communication (SMS and voice) to millions of phone numbers they may have most probably accessed from the AirtelTigo platform.

“We can’t have this kind of abuse and unfair advantage in our country,” he said.


Meanwhile, one expert thinks, in the wake of the AirtelTigo government takeover, there is a need to also discuss the 30% government stake in Vodafone, which he thinks, is what has prevented Vodafone from being able to meet requirements to list on the local stock exchange and raise the needed funds to grow.

“Vodafone has become a shadow of its real self – only keeping up appearances, when in fact all is not well. And they are now visibly fighting to get the growth of the market leader curtailed to give them and the other telcos some breathing space to grow,” he said.


But from all indications, according to the expert, even the recent declaration of MTN as a significant market power (SMP) and the subsequent application of regulatory interventions, is not going to stop MTN from still growing market share and increasing subscriber base.

Indeed, one of the experts predicted that, with the kind of innovations MTN is working on, if government does not handle the AirtelTigo issue properly, MTN will be the biggest winner in terms of boost in subscriber base.

As for Glo – well they are also in the system.



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