Govt, Bharti in talks

Tuesday March 13 2018

Constitutional and Legal Affairs minister

Constitutional and Legal Affairs minister Palamagamba Kabudi with Bharti Airtel managing director Jantina Uneken-van de Vreede (centre) and the telecommunications multinational’s general counsel Mukesh Bhavnani when the senior Bharti Airtel officials arrived in Dar es Salaam for talks with the government yesterday. PHOTO | STATE HOUSE 

By The Citizen Reporter @The Citizen Tz

Dar es Salaaam. Talks between the government and Bharti Airtel regarding ownership of Airtel Tanzania Limited commenced in Dar es Salaam yesterday.

Tanzania’s negotiation team in the talks is led by the Minister for Constitutional and Legal Affairs, Prof Palamagamba Kabudi, while the Bharti Airtel delegation is led by the company’s head of legal department, Mr Mukesh Bhavnani.

According to a statement released to the media by the Directorate of Presidential Communications, the two parties are meeting following a special request from Bharti Airtel.

“The two sides meet following a request from Bhati Airtel… They also intend to improve the telecommunications sector,” read the statement in part.

According to the statement, Bharti Airtel requested to have the meeting after a team formed by President John Magufuli to probe the ownership of Airtel Tanzania submitted its report to the president.

Details on why the government is claiming full ownership of Airtel Tanzania Limited can be revealed by The Citizen.

The Tanzania Telecommunications Company (TTCL) is likely to officially announce its claim of sole ownership of Airtel Tanzania today, a move that is likely to rattle Tanzania’s telecoms sector.

At the end of last year, President Magufuli directed the Minister for Finance and Planing, Dr Philip Mpango, to launch an investigation into the ownership of Airtel Tanzania Limited.

President Magufuli said he wanted to know how TTCL shares in Airtel’s predecessor, Celtel Tanzania Limited, were offloaded.

He spoke during the laying of the foundation stone for the construction of the National Bureau of Statistics (NBS) head office in Dodoma.

Dr Magufuli’s stance is that Airtel Tanzania was owned by the state-run TTCL before its shares were “irregularly switched around.”

Airtel’s current ownership is divided between TTCL (40 per cent) and Celtel Tanzania BV, an affiliate of Zain-Africa BV, which was acquired by Bharti Airtel International in 2010.

Details exclusively seen by The Citizen reveal why the government is bullish about its ownership claim of Airtel, with TTCL board chairman Omar Nundu scheduled to speak about the matter today.

The TTCL investment, according to the details, was $40 million (Sh88 billion) in return for a share equity in Celtel – and the balance of $42 million (Sh92.4 billion) in the form of a loan to Celtel to be repaid in six months at 4.75 per cent annual interest.

It is, for example, unclear why the minority shareholder, Mobile Systems International Cellular Investments (Tanzania) B.V. (MSIT), was allotted 35 per cent of TTCL shares by the board during the transfer of its shares in Celtel.