Etisalat Said to Consider Sale of Stake in Tanzanian Unit

Emirates Telecommunications Corp., the United Arab Emirates’ largest phone company by market value, is exploring a sale of Tanzanian unit Zanzibar Telecom Ltd., according to people with knowledge of the situation.

Deutsche Bank AG is working with Etisalat on the sale of its 65 percent stake in Zantel, said the people, who asked not to be identified because the talks are private. Dar es Salaam-based Zantel, Tanzania’s largest Internet provider, has attracted interest from Vodacom Group Ltd. and may also draw Millicom International Cellular SA as a suitor, the people said.

An acquisition of Zantel would give a buyer access to spectrum in Tanzania, helping it cope with growing demand for mobile data. About 57 percent of people in Tanzania had wireless access in 2012, compared with a rate of more than 71 percent in neighboring Kenya and 131 percent in South Africa, according to data compiled by Bloomberg.

Zantel had sales of about $85 million last year, according to an Etisalat document published in May. The unit was in a default for non-payment of a $96 million bank facility, with the lender saying it may take enforcement action against Zantel unless a payment is made, according to the document.

Representatives for Abu Dhabi-based Etisalat weren’t available to comment. Representatives for Vodacom, Millicom and Deutsche Bank declined to comment.

Vodacom fell 0.2 percent to 129.25 rand at 9:38 a.m. in Johannesburg, and Millicom slipped 2 percent to 573 kronor in Stockholm. Etisalat gained as much as 0.9 percent and added 0.4 percent to 11.70 dirhams as of 11:38 a.m. in Abu Dhabi.

Data Growth

Vodacom is Tanzania’s largest wireless carrier with 10.6 million subscribers, while Zantel is the fourth-biggest with 1.7 million as of June, according to the country’s communications regulator. Meeco International of Tanzania owns 17 percent of Zantel and the government of Zanzibar, a semi-autonomous nation in a political union with Tanzania, holds 18 percent, according to the phone company’s website.

Vodacom, 65 percent owned by Newbury, England-based Vodafone Group Plc, is also South Africa’s largest wireless carrier by subscribers. Luxembourg-based Millicom provides phone services in Africa and Latin America.

African carriers are trying to boost data usage in a continent where smartphones are prohibitively expensive, fixed-line infrastructure is scarce and revenue from wireless calls is slowing in the most developed markets.

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