Tigo Rwanda re-assures its clients amid uncertainty over Airtel takeover

Tigo Rwanda has urged its stakeholders to remain calm saying that business will continue as normal, despite the recent takeover by Airtel.
Tigo Rwanda CEO Philip Amoateng. File.
Tigo Rwanda CEO Philip Amoateng. File.

Tigo Rwanda has urged its stakeholders to remain calm saying that business will continue as normal, despite the pending merger with Airtel.

The Indian based company Bharti Airtel announced it was buying 100 per cent equity stake of the Millicom based subsidiary company Tigo Rwanda Limited.

The announcement may have caused anxiety amongst customers, agents, distributers and staff, with some withdrawing their savings or emptying their mobile money wallets.

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Tigo’s mobile money platform is popularly known as Tigo cash.

During a news conference Wednesday, Philip Amoateng, Tigo Rwanda’s Chief Executive Officer re-assured all stakeholders saying that business at the telecom company will remain as usual.

He noted that the deal with Airtel brings more benefits that the clients should look forward to.

“It is imperative to note the benefits that come with this merger include enhanced connectivity, a wide and well-integrated network,” Amoateng said.

To the employees, the CEO said he was confident of their skills and believes they would be handy to the new employer.

Tigo Rwanda employs about 3000 people, including 120 part-time staff, 141 permanent staff and majority distributors.

“We are confident about our employees and believe Airtel will take good care of them,” Amoateng said. He, however, added that in the unfortunate event that there are lay-offs, they will be done in accordance to the law.

The deal between the two telecom giants is likely to stiffen competition within the telecom industry across the country, according to experts.

With operations in 17 countries across Asia and Africa, sector experts say Airtel-Tigo deal could change the model of telecommunication business in the country.

First, the move means Airtel will now consolidate the Rwandan telecom market and position itself as a strong contender in Rwanda with revenues of over $80 million.

According to RURA, Tigo’s share of the market stood at 40 per cent overall, MTN held 41 per cent and Airtel 19 per cent of a combined active subscriber base of 8,675,826 at the end of October.

The takeover therefore means Tigo Rwanda now joins over 370 million customers on Airtel’s global network across 17 countries to enjoy the benefits such as international roaming, and high quality 3G, 4G speed as well as Airtel Money services.

Sector experts expressed confidence about the takeover, saying it could be a game changer in the country’s telecom business that will help create synergies with existing business and boost operational efficiencies in the market.

In an earlier interview with The New Times “Annet Uwiragiye, a telecom and ICT expert based in Kigali said ‘‘The Rwandan telecom market will significantly benefit from this acquisition, further reiterating our stand that in-market consolidations do not just help achieve better market positions but benefit customers and the industry as a whole.

According to Sunil Bharti Mittal, the Chairman, Bharti Airtel, Airtel has taken proactive steps in Africa to consolidate and realign the market structure in the last few remaining countries, where its operations are lagging on account of lower market share and presence of too many operators.

Airtel and Tigo have already merged their operations to create a strong viable entity in Ghana. Today [yesterday], it has taken yet another important step to acquire Tigo Rwanda to become a profitable and a strong challenger in a two-player market,” he reaffirmed.

“We are also committed to the long-term viability of our operations in two other countries i.e. Kenya and Tanzania, to ensure that in 2018 all our 15 operations in Africa start contributing positive margins and cash flows towards a healthy and profitable Airtel Africa,” he added.

The agreement aims to bring together the strengths of Airtel and Millicom in Rwanda and is expected to offer benefits to customers in the form of a wider network, affordable voice and data services, and superior customer care.

Raghunath Mandava, the Managing Director and CEO, Airtel Africa, said, “The acquisition reinforces our commitment to the Rwanda market and is a significant step towards creating a stronger presence in the country.”

On completion, the proposed acquisition will undergo seamless integration, both on the customer and the network side, and further strengthen market position.

The consideration for the transaction is based on approximately 6x EBITDA multiple, payable over two years.

The agreement is subject to regulatory and statutory approvals.

In Ghana, the merger was announced in March 2017, but got conditional approval from the Ghanaian regulator in September 2017. In November, the new merged entity officially unveiled a new logo and name, with the TIGO CEO taking over and the Airtel boss resigning.

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Airtel explains

In a statement issued yesterday by Airtel, the telecom company explained that everything remains the same for now until the requisite regulatory approvals are concluded by RURA.

After the approval, the two entities will commence the actual integration process which entails consolidating their customers, operations, people and infrastructure.

“We strongly believe that consolidation will lead to a greater industry stability, scalability, better quality of service and innovation that will benefit the customer. The integration will allow us to leverage the strengths of both entities to better serve our customers,” it said.

It cited several benefits expected from their merger. These include improved coverage and enhanced customer experience across a wider network of customer touchpoints.

Combined customers will now be part of a bigger family benefiting from competitively priced services.

Our Mobile Financial Services footprint will be greatly enhanced with combined agent networks and platforms, the company said.

It further explained that customers’ SIM cards and mobile numbers will not change, adding there will be no interruption to customers’ experience on both networks for the moment.

editorial@newtimes.co.rw

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