On Wednesday, the board of Bharti Airtel cleared the sale to the government of the African country of its Ghana Joint Venture – Airtel Tigo and acknowledges the impairment fee of Rs184.1 Crore for the contract.
“The parties are in advance stages of discussions for the conclusion of the commercial agreement for the transfer of AirtelTigo on a going concern basis to the Government of Ghana,” Airtel said in a statement to the Bombay Stock Exchange on Wednesday.
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The deal proposed would lead the Ghana administration and all its clients, properties and liabilities to acquire a 100 per cent stake in Airtel Ghana Ltd, also known as AirtelTigo.
“Accordingly, Airtel is voluntarily taking an impairment charge of Rs 1,841 million (Rs 184 crore),” the statement added. AirtelTigo is a joint venture between ‘Airtel’ and ‘Millicom’ wherein Airtel holds a non-controlling 49.95% share in AirtelTigo.
In 2017 Airtel had combined its operations in Ghana with Millicom, resulting in the country’s second-largest mobile carrier. The merger was approved by the regulator provided that the government of Africa would have the option in future to take an interest in this new company.
But MTN and Vodacom in the country have fallen behind the joint venture. Airtel has already confirmed that it will look at prospects for consolidation, including exit, in markets where it is not one of the top two players.
Airtel said that the Ghana operations have a customer base of 5.1 million, based on quarterly results ended September 30. In the last four years, the company subsequently lost Rs 8.8 crore to Ebidta and last quarter to Rs 9.9 crore to Rs 30. In the fourth quarter the overall revenue remained stagnant at Rs 118 crore and data customers also dropped from 59.4 per cent in the June quarter to 56.2 per cent.
Bharti Airtel’s activities in Africa saw this fiscal down 8.3% year-on-year at $88 million net profit, affected by increased net financial costs in the second quarter. However, combined sales stood at $965 million, up 14.3 per cent from the same quarter last year.
Data Source: telecom.economictimes
