Business News of Monday, 25 September 2017
Adom News can confirm that National Communications Authority (NCA) has granted conditional approval for the merger between Tigo Ghana and Airtel Ghana.
This was contained in a circular that the managements of Tigo and Airtel sent to their respective employees following a story Adom News put out indicating workers were extremely anxious about lack of information about the merger.
The very day the story was put out, workers of Airtel got a notice via email that read “Kindly note that on Thursday, Sept. 14, we received a conditional approval from the National Communications Authority on the planned Tigo Ghana and Airtel Ghana merger.”
Adom News source within government confirmed that indeed conditional approval has been granted but the two telcos are yet to return to the NCA regarding the conditions spelt out to them.
“It would be premature for me to tell you what those conditions are because the two telcos may come back seeking adjustments so let us complete the process first,” the source added.
The two networks agreed way back in March to merge their operations based on equal ownership and governance rights.
It has been six months and the merger has still not fully materialized. Workers of both companies have been anxious about their fate in the whole process, while some have just jumped ship to avoid any surprises.
In the midst of the delays, it emerged that the issue of double spectrum and its implications for the market and for consumers, plus government’s minority shares in Airtel, are some of the reasons for the delay.
An industry expert told Adom News he believes there is no point in government seeking to own shares in the merged company because governments often does not contribute its share of investment in companies it owns shares in, but seem to look for its share of profits.
This is the first such joint venture is happening in Ghana’s highly competitive telecom sector, and the expert believe investors are watching to see whether or not government would conduct itself in ways they will deplete value for the parties.
Indeed, more of such mergers in the telecom sector have long been predicted and this is just the beginning.
If Tigo and Airtel finally come together, the new entity would become Ghana’s second largest telco serving around 10 million subscribers with revenues close to $300 million.
MTN Ghana will still remain market leader, but Vodafone, which is now second, will be pushed down to third place.