Millicom is selling its Tanzania operations to Madagascar’s Axian as the Nasdaq and Stockholm-listed emerging markets telecoms group pulls out of Africa to focus on Latin America. With 13m customers, Tanzania is Millicom’s main operation in Africa, where it is among the top three telecoms operator by number of customers.
On Monday, Millicom agreed to sell its entire operations for an undisclosed amount to Axian, an Antananarivo-based pan-African group that was part of the consortium that snapped up Millicom’s operations in Senegal in 2018. “We knew that asset for a while because Tanzania has huge potential,” Hassanein Hiridjee, the CEO of Axian, told the Financial Times. “When we found that Millicom was divesting from Africa we said: ‘we must go there, we must’.” With $366m in revenues last year, Tanzania represents a meagre 6 per cent of Millicom’s total revenue.
Africa, the Miami-based company said, has historically generated lower returns than Latin America, where it has very profitable operations, especially in Guatemala, El Salvador, and Panama. Millicom, via its Tigo brand, counts more than 52m mobile subscribers across 11 countries in Latin America and Africa. Yet, over the past four years, it has sold its operations in the Democratic Republic of Congo, Rwanda, Senegal, and Chad.
On Friday, it agreed to transfer its stake in AirtelTigo to the government of Ghana — where it had a joint venture with India’s Airtel — taking on a $25m charge. Now, the selling of Tigo in Tanzania means the emerging market telecoms will be fully exiting Africa this year. “Millicom is a Latin American focused telecom company with 95 per cent of our revenues coming from that region. With the announcement today of the divestiture of our remaining African businesses we draw a close on a chapter in our history and open another solely focused on the Latin American region,” Mauricio Ramos, the CEO of Millicom, told the Financial Times.
For Axian, the entrance to the Tanzanian market comes at a time of great expectations after the east African country’s new president, Samia Suluhu Hassan, signalled that she would improve strained relations with investors and multinational companies following five years of growing anti-market isolation under her predecessor, John Magufuli, who died in March.
Axian owns Telma, a telecom firm operating in Madagascar, Comoros, Réunion Island and Mayotte, and has a presence in Senegal through its operator Free Senegal, formerly Tigo, and in Togo, through Togocom. The company was the first to roll out 5G in Africa and is one of the biggest investors in the EASSy — 10,000km submarine cable system deployed along the east and south coast of Africa that services voice, data, video and internet.
Tanzania will be Axian’s first venture into an anglophone country, where it plans to invest some $400m over the next five years. “We already have shared infrastructure. We’re very much interested in this market, which is not far from our home market,” Hiridjee added.