By RAY NALUYAGA, The EastAfrican
BHARTI AIRTEL Ltd and the Tanzanian government
have failed to reach a deal on the purchase of 35 per cent stock of the
Tanzania Telecommunications Company Ltd (TTCL) after two rounds of
talks.
The government had intended to acquire the stocks
to raise its shareholding in TTCL to 100 per cent, and revive the loss
making parastatal into a competitive data and mobile phone services
company.
In early November, the government, which owns 65
per cent of the company, announced that it had formally begun the
process to buy back the shares that had been sold to the consortium of
MSI of the Netherlands and Detecon of Germany for $62 million in
February 2001. At that time, the company was operating as Celtel.
The shares were then sold to Kuwait-based Zain
Group, which, in 2010, sold all its operations in Africa to Bharti
Airtel of India.
In April 2010, before Zain sold its shares to
Bharti Airtel, the government and the Kuwait-based company had signed an
agreement to buy the shares to make TTCL government-owned.
Negotiations
However, the deal could not be reached because at
the time the government was offering Tsh14 billion ($8.7 million) while
Zain asked for Tsh100 billion ($62 million).
In negotiations held two weeks ago, Bharti Airtel
offered the shares to the government for $62 million, but the government
declined the offer claiming that the shares are worthless following
losses and debts incurred by TTCL.
The two sides have now engaged private audit firms
to look into the matter with TTCL seeking the services of Deloitte and
Touche and Bharti Airtel engaging KPMG. Both companies have said they
will give the results within two weeks.
The deal is further complicated by the fact that
the government owns 40 per cent of mobile phone operating company Airtel
Tanzania, a subsidiary company of Bharti Airtel.
Soon after Bharti Airtel bought Zain, it offered
the government $11 million for its stake in the company, but the
government rejected the offer saying that it planned to buy the rest of
the shares of the company.
The Tanzanian government was not happy with Bharti
Airtel’s acquisition of the Zain Tanzania operation, saying it went
against the partnership agreement between Zain Tanzania and TTCL.
Soon after Bharti Airtel acquired Zain Tanzania,
the then permanent secretary in the Ministry of Finance and Economic
Affairs, Ramadhan Khijjah, said Zain Tanzania did not fully communicate
information about the Bharti Airtel deal to the government.
Three-year plan
Speaking to The EastAfrican about plans
to revamp TTCL, the company’s CEO Kamugisha Kazaura said they have
started to roll out a three-year plan, in which they will spend up to
$300 million.
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