Combined operations will serve more than a quarter of Ghana’s mobile customers, according to NCA.
Ghana’s third and fourth largest mobile operators on Friday announced their intention to merge to become the market’s number two player.
Millicom and Bharti Airtel will combine their Ghanaian businesses, which use the Tigo and Airtel brands respectively, to create an operator serving more than a quarter of the country’s mobile subscribers, according to recent regulatory figures. However, the resulting entity will still have some way to go before it can challenge the dominance of market leader MTN.
Subject to regulatory approvals and the satisfaction of various closing conditions, Millicom and Airtel will integrate their networks and operations in Ghana to form a single company with close to 10 million customers and revenues of almost $300 million, the pair claimed.
The two telcos will have equal ownership and governance rights in the new operator.
"In a highly fragmented telecom market, this deal represents a major milestone for our business in Ghana," said Mohamed Dabbour, executive vice president of Millicom Africa, in a statement.
"This transaction underlines confidence in the Ghanaian economy, and provides the opportunity to develop nationwide digital infrastructure and services in Ghana," he added.
Millicom is in the process of reshaping its portfolio of telecoms assets in South America and Africa; it sold its Tigo business in the Democratic Republic of Congo to Orange in April and agreed to sell its Senegalese business to local digital financial services specialist Wari a month ago. Various media reports over the past year had suggested that the Ghana business could be one of the next on the block, but clearly the telco has found an alternative way to boost its competitive position in the market.
The deal also provides a valuable boost for Airtel.
"The agreement highlights our commitment to the Ghana market and our customers," said Raghunath Mandava, MD and CEO of Airtel Africa.
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," he added.
At the end of last year Airtel was the fourth-largest mobile operator in Ghana with a market share of 11.99%, according to the most recent figures from the country’s National Communications Authority (NCA).
Tigo was the third-largest player with 13.94%; the two together can claim a market share of 25.93%, putting the combined entity ahead of number two operator Vodafone.
However, market leader MTN remains some way ahead, with 50.37% of the market.