Airtel is exiting the Ghana market. The telco announced late last month that it was in advanced talks with the Ghanaian government for the sale of its 49.95% shares of venture with AirtelTigo.
“Bharti Airtel Limited (Airtel) in its Board Meeting held earlier today announced the approval of the Board for concluding an arrangement with the Government of Ghana wherein Government of Ghana will acquire 100% shares of Airtel Ghana Limited (AirtelTigo or the company) along with all customers, assets and agreed liabilities.
“The parties are in advance stages of discussions for conclusion of the commercial agreement for the transfer of AirtelTigo on a going concern basis to the Government of Ghana,” the company said in its filing.
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As of March 2020, AirtelTigo had 15.81% market share of voice subscribers, and a 20.25% share of internet data subscribers, according to data published by Ghana’s National Communication Authority.
Airtel did not disclose how much the deal is worth.
However, the decision came around the same time MTN announced it’s leaving Ghana, Zambia and Syria. The telco announced it has fully implemented localization of an 8 percent shareholding in MTN Zambia, with a net proceeds of R204 million.
The group said it also intends to sell 12.5% of its investment in MTN Ghana with a focus in local shareholding. The move will increase MTN Ghana’s free-float on the Ghana Stock Exchange (GSE) to 25%.
And as part of its sales plan, MTN said it intends to exit its 75% stake in MTN Syria and plans to sell its 20% shareholding in Belgacom International Carrier Services SA (BICS).
Although it is not clear why the telcos are exiting Ghana, their decision to leave the West African country could be traced to the government’s decision to force level playing ground by minimizing the telcos dominance in June.
In June, Ghana’s telecom regulator, the National Communication Authority said it is working on “specific policies” that will minimize the dominant influence of MTN. The South African company has become the largest network in Africa dominating almost in every country of its operation. Ghana’s Communication Authority said the move is necessary in order to facilitate a level playing ground for telcos in the country after classifying MTN as “dominant market power.”
MTN’s dominance became notable in 2018 after its initial public offering recorded 84.6% of local buyers who used the telco’s mobile Momo Wallet. The IPO took Ghana’s stock market by storm to become the largest ever traded in history of the market. Thousands of Ghanaians purchased shares using their Momo wallet accounts to raise $237 million for MTN.
Ghana is pushing for financial inclusion and sees MTN’s rapid growth as a threat that needs to be curtailed if other players will have a shot. In March, MTN dominated in both voice and data services, leaving its closest competitors, Vodafone and AirtelTigo two places behind.
Banks are other players in the country’s financial sector at risk of being dominated by MTN’s mobile money services. It appears that the Bank of Ghana and the NCA are concerned that the push for wider financial inclusion will be monopolized by MTN if nothing is done to reduce its growth.
Ghanaian government’s decision to limit the power of telcos to compete and exert dominance based on their abilities seems to have sparked the exodus.