Millicom has reported that it secured US$25 million from the AirtelTigo transfer to the government of Ghana, as it agrees to sell its operations in Tanzania to Axian Group from Madagascar.
The Ghana and Tanzanian deals completes the final chapter of Millicom’s long-running strategy to exit Africa and concentrate on Latin America.
The company had already existed Chad, DR Congo, Senegal and Rwanda.
Unlike in the Ghana deal, where the company reported securing some US$25 million, it did not disclosed how much it got from Axian Group for the Tanzanian sale.
Millicom CEO, Mauricio Ramos explained the African asset divestitures opens a new chapter in the company’s history “solely focused on the Latin American region”, where it will look to deliver “reliable high-speed mobile and fixed broadband” to address factors such as “low penetration and data speeds”.
So, Millicom’s current portfolio shows all of its operations are now in Latin America, specifically Bolivia, El Savador, Guatemala, Paraguay and Colombia.
In Ghana, Millicom merged with rival Airtel Ghana to create AirtelTigo, pass on the assets to the government, as a strategy to exit clean without any liabilities.
It decision to merge with Airtel in Ghana has been described by several industry experts as a move to “outsmart the government”, because the merged company was largely deemed as bound to fail.
Meanwhile, Bharti Airtel hard earlier reported to its share holders it also secured US$25 million from the Ghana deal. It is therefore not clear if both Airtel and Millicom go US$25 million appease, or US$25 million to share.
The Ghana government has announced that a greater part of the liabilities of AirtelTigo have been forgiven and government says it will manage the telco effectively to benefit all stakeholders.
But again, experts say the only to go is to private the company, either through a sale of majority shares to a strategic investor, or package the company well and list it on the stock exchange.
One experts said “any other option is bound to be a fiasco”, while another said “government cannot run AirtelTigo.”