Bharti Airtel has entered into an agreement with Millicom International Cellular S.A. to acquire the latter’s entire stake in Rwanda operations, Tigo Rwanda. The move will see the country’s telecom sector consolidating into a two-player market, with MTN being the other operator.
At present, Bharti is No.3 operator in the country. The merged entity - Bharti-Millicom – will have revenues of $80 million with a 40 per cent market share.
The acquisition would be conducted through its subsidiary Airtel Rwanda. The consideration for the transaction is based at about six times EBITDA multiple, payable over two years, the company said in a statement. Further financial details were not disclosed.
“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,” Bharti Airtel Chairman Sunil Bharti Mittal said.
Following the acquisition, Tigo Rwanda existing customers will join Airtel’s network, which currently has more than 370 million customers across 17 countries.
Bharti’s Rwanda operations had generated $22.5 million in revenues in calendar year 2016.
With in-country acquisitions, Airtel has been solidifying its market position to become a key player in the continent. In the past, Airtel had acquired assets in Uganda (Warid) and Congo B (Warid), Kenya (yu Mobile) and consolidated operations in Ghana (Millicom).
With presence across 15 African countries, Airtel had close to 83 million customers as of September 30, 2017. Globally, Airtel is ranked as the third largest mobile services provider in terms of customer base.
“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,” Raghunath Mandava, MD and CEO, Airtel Africa, said.