India’s Bharti Airtel, which offers mobile telecoms services in 17 countries across Africa and Asia is looking forward to expanding its turf in the operator business. Its latest addition is a signed agreement with Millicom International Cellular S.A., under which Airtel Rwanda will acquire 100 percent equity interest in Tigo Rwanda.
This development will bump Airtel Rwanda’s position as the country’s second largest operator. The operation is based on 6x Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) multiple that will be finalized in 2 years. Rwanda’s ICT regulators will examine the deal.
“Airtel has taken proactive steps in Africa to consolidate and realign the market structure in the last few remaining countries where its operations are lagging on account of lower market share and presence of too many operators. Airtel and Tigo have already merged their operations to create a strong viable entity in Ghana. Today, it has taken yet another important step to acquire Tigo Rwanda to become a profitable and a strong challenger in a two-player market.
We are also committed to the long-term viability of our operations in two other countries i.e. Kenya and Tanzania, to ensure that in 2018 all our 15 operations in Africa start contributing positive margins and cash flows towards a healthy and profitable Airtel Africa,” says Sunil Bharti Mittal, Chairman, Bharti Airtel.
This statement disproves earlier speculations that Airtel Kenya was considering to abandon the local market after failing to turn in profits in years.
It should be noted that this acquisition will focus on bringing the strengths of Airtel and Millicom to offer better products to customers, including affordable voice and data services, superior customer care and extended network coverage. The deal will also see customers enjoy additional benefits such as One Airtel that subsidizes roaming rates in Africa and South Asia.
“The acquisition reinforces our commitment to the Rwanda market and is a significant step towards creating a stronger presence in the country. It will create synergies with our existing business and help boost operational efficiencies in the market. The Rwandan telecom market will significantly benefit from this acquisition, further reiterating our stand that in-market consolidations do not just help achieve better market positions but benefit customers and the industry as a whole,” remarked Raghunath Mandava, MD and CEO, Airtel Africa.
Similar to what happened to Airtel Kenya’s acquisition of Yu Mobile, Rwanda’s case will see seamless integration, both on the customer and network side.
It should also be noted that this is the second in-country Millicom acquisition after Ghana’s. Past consolidated operations have been done in Uganda (Warid) and Congo B (Warid).