Business News of Friday, 24 February 2017
Citi Business News has learnt telecom operators; Airtel and Tigo, have completed merger talks to make the two companies one entity in Ghana.
The talks which commenced last year were finalized early this year-2017, with persons familiar with the move asserting, that an announcement on the completion will be made soon.
It still remains unclear whether the two companies will be holding an equal share in the new stake.
Benefits of merger
Profits in the Ghana’s telcom industry has been declining for some time as a number of challenges including Ghana’s power crises, high cost of operations and low tariffs for telecom operators continue to hurt telecom operators.
The merger between the two is however expected to push the new entity to the number two spot of leading telecom operators in Ghana, after Vodafone which is at number two and MTN, which is the currently the biggest telecom operator in Ghana.
Ghana has six Mobile Network Operators (MNOs), MTN, Vodafone, Tigo, Airtel, Glo and Expresso.
Performance of telecom companies
According to statistics from the National Communications Authority (NCA), figures from the six companies, show mobile telephone subscriptions in Ghana increased from 36,613,987 at the end of second quarter of 2016 to 37,239,720 at the end of third quarter of 2016, indicating 1.7% quarter-on-quarter growth rate.
There was a year-on-year growth of 11.9%, from 33,270,440 in September 2015 to 37,239720 in September 2016, while mobile penetration rate increased from 131.9% in the second quarter of 2016 to 133.3% at the end of third quarter of 2016.
At the end of the third quarter of 2016, MTN had the largest share with a total Subscription of 18,050,144 representing 48.5% of the total mobile market in Ghana, followed by Vodafone with subscription of 8,158,527 (21.9%), Tigo 5,402,668 subscriptions (14.5%) and Airtel 4,697653 subscriptions (12.6%).
Glo and Expresso had a subscription of 828,162 and 102,566 representing 2.2% and 0.3% market shares respectively.
Leadership of new entity
It is unclear who will be at the helm of affairs following the union of the two companies or whether one of the current CEOs of the two entities Lucy Quist of Airtel or Roshi Motman of Tigo will be appointed to lead affairs following the merger.
The two have both been credited with a number of positive transformations in their respective companies.
Roshi Motman made history in Ghana a few years back when she was appointed the first woman MD of a telecom company, while Lucy Quist did same when she was also appointed the first female Ghanaian CEO of a telecom company.
The two companies have so far remained tight lipped over the merger, leaving customers and workers clueless over the developments and their fate.