Airtel and Millicom to merge operations in Ghana

Bharti Airtel and Millcom have struck an agreement that will see them merge their subsidiaries in Ghana in a 50:50 JV.

The deal will see Tigo Ghana merge with Airtel Ghana, becoming the African country’s second biggest operator, serving nearly 10 million customers with revenues close to $300 million.

The combined unit will have around 5.6 million data customers, and offer 3G connectivity to around 80% of Ghana’s population, giving it the widest 3G reach across the country, according to a joint statement.

Mohamed Dabbour, EVP, Millicom Africa, said: "In a highly fragmented telecom market, this deal represents a major milestone for our business in Ghana. The combination of Tigo and Airtel will create an operator that will be able to offer Ghanaian consumers and businesses a state of the art network with high speed mobile data coverage. 

“This transaction underlines confidence in the Ghanaian economy, and provides the opportunity to develop nationwide digital infrastructure and services in Ghana."

The deal had been rumoured in January, with Millicom refusing to confirm talks were taking place when asked by Capacity. The JV will compete directly with MTN, the largest operator in Ghana, and Vodafone.

Airtel is trying to improve its loss-making operations in Africa, where it has not made a profit since buying most of Zain’s African business in 2010 for $10.7 billion.

The Indian operator lost $91 million on its African operations in the most recent quarter, with income of $900 million, compared with a loss of $170 million in the equivalent quarter a year ago.

Raghunath Mandava, MD and CEO, Airtel Africa, said: "The agreement highlights our commitment to the Ghana market and our customers. The coming together of the two entities will benefit customers, who can now enjoy an extensive combined network and a wider range of affordable and innovative products and services. It will further strengthen our position in the market and offer huge benefits arising out of synergies in operations, resulting in better experience for the customers."