A Telecom Analyst, Fouad Chalabi, has raised several questions as to why the government wants to purchase the shares of the telecommunications company, AirtelTigo.
Speaking on the issue in an interview, Fouad Chalabi intimated that such a decision by the government could send wrong signals to the stakeholders as well as other industries in the country. Besides, the government is unlikely to benefit from the move, he added.
“I don’t understand the need for buying an operator at this stage, especially that this is not an operator that is making a profit. I believe that this will send a bad signal for many industries, [making them think that] they can be in an environment where no matter how bad they can perform, the government will come in and help them,” Fouad Chalabi remarked.
The Telecommunications analyst, however, posits that “maybe the move from government is to save jobs, but we are in a liberal open market. With the dynamics of the market and how things are happening, I don’t have any reason why I would go as a government to buy an operator.”
The cost of undertaking the deal is not commensurate with the benefits to be derived by the government. The telecom operator seldom made any substantial profit even after the merger in November 2017, Fouad Chalabi commented.
AirtelTigo is a joint venture between Bharti Airtel and Millicom International Cellular SA, operators of Tigo in Ghana. The two companies merged their operations in Ghana in November 2017, becoming the second-largest telecom operator in Ghana at the time. Bharti Airtel holds a non-controlling interest of 49.95 percent of the total shares in AirtelTigo.
AirtelTigo is a dynamic and innovative brand providing a wide range of telecommunications services including mobile voice, data, mobile financial services, and business connectivity.
The decision of the Government of Ghana to buy out all the shares of Telecommunications operator AirtelTigo has received a lot of agitations from the general public.
These tensions arose after the government revealed that it has reached advanced stages with regards to its intentions to takeover AirtelTigo.
The Government of Ghana seeks to acquire the shares of AirtelTigo together with its customers, assets, and agreed liabilities under the proposed deal. The telecommunications company has 400 retail outlets across the country, 2000 network footprints, and approximately 5.1 million customer records in its database.
According to the government, the decision to completely buy out the shares of AirtelTigo is a move geared towards saving jobs and safeguarding the interest of stakeholders.
Even though the merger between the two companies was approved by the National Communications Authority, subject to the condition that the government, will have the option to pick up a stake in the new entity in the foreseeable future, it has not been able to hold up its operations to maintain a competitive edge over its counterparts. The joint venture continues to lag behind telecommunications giant MTN and then Vodafone over the years.
