15 Feb Senegal: The reasons for the sale of Tigo Senegal to Wari
In an interview with the Senegalese news site seneweb.com , the marketing director of mobile operator Tigo Senegal, Joyce S. Gotta is back on the reasons for withdrawal of Millicom International Cellular (MIC) of Senegal. She said that the operation ” is part of the overall strategy of the group is to gradually get out of Africa and invest a little more in some other areas in Latin America where the business is far more profitable .”
Gotta Joyce emphasizes that he did not ” easy to get out of Tigo Senegal because the sale took place at the time, three years ago, the company was growing. Since the launch of 3G and with the initiatives taken by the General Management, we have seen our market share increase. We launched successively Tigo Cash and Tigo Business. We have seen that in terms of digital operator, it is among the best of the place . “
In its progress report for 2016, the MIC group reported that its markets in Africa (Senegal, Tanzania, Ghana, Chad and Rwanda, Editor’s note) performed well during the year. Mauricio Ramos, the chairman and CEO of the telecom group, even says they have exceeded expectations. Income increased by 10.5% and the EBITDA margin (earnings before interest, taxes, depreciation and amortization) improved from 22% in 2015 to 29%. More importantly, African markets generated operating cash flow of $ 97 million.
However, the decision to sell Tigo Senegal was necessary. The Millicom Group reports in its 2016 report that Africa’s markets have met the targets for improving their incomes. The strong competition that is currently developing and the new regulatory constraints represent risks that force the company to focus on markets in Latin America (Colombia, Guatemala, Paraguay, Honduras, El Salvador, Bolivia and Costa Rica) Which have greater potential. They account for 86% of the revenue of the telecoms group, with a margin of maneuver still very important. Of the $ 6.249 billion of revenue generated by Millicom in 2016, Latin America accounted for $ 5.352 billion, compared with $ 896 million for Africa.
Source: Agence Ecofin