Millicom, which operates in emerging markets via the Tigo brand, has been withdrawing from the African continent for some time. The past four years have seen the operator divest of business operations in the Democratic Republic of Congo, Rwanda, Senegal, and Chad, noting that these businesses are simply not as profitable as their Latin American operations…
Millicom, which operates in emerging markets via the Tigo brand, has been withdrawing from the African continent for some time. The past four years have seen the operator divest of business operations in the Democratic Republic of Congo, Rwanda, Senegal, and Chad, noting that these businesses are simply not as profitable as their Latin American operations.
Now, the company’s African exodus is finally set to be completed with the sale of the Tanzanian business to a consortium led by Madagascar’s Axian and its Ghanaian business to the country's government.
“Millicom is a Latin American focused telecom company with 95 per cent of our revenues coming from that region. With the announcement today of the divestiture of our remaining African businesses we draw a close on a chapter in our history and open another solely focused on the Latin American region,” said Millicom CEO Mauricio Ramos.
In Tanzania, Millicom has agreed to sell its entire business for an undisclosed sum to an Axian-led consortium. This is not the first time that the Madagascan telco has been looking to capitalise on Millicom’s withdrawl, having also led a consortium for the purchase of Millicom’s Senegalese business back in 2018.
Meanwhile, the company has also reached an agreement with its joint venture partner Bharti Airtel on Friday to transfer its stake in AirtelTigo to the Ghanaian government, taking on a $25 million charge.
No further details of either deal have been released, but both deals will be required to receive the typical regulatory approval.
Given Millicom’s trajectory in Africa over the past few years, these withdrawals should not come as a major surprise. The company reported a 5.3% decline in revenues to $1.03 billion in the final quarter of 2020, with the coronavirus pandemic hitting the company hard throughout the year. Africa remains a market of relatively slim margins, especially in comparison to Millicom’s highly profitable Latin American operations in Guatemala, El Salvador, and Panama, where it continues to expand operations.
Just last week, Millicom’s B2B brand Tigo Business announced a deal with Amazon Web Services to support its corporate cloud services in Central America and Colombia.
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