MSI Cellular says it has finalised a deal to become the strategic investor in the Tanzania Telecommunications Company (TTCL) with German partner Detecon.
A first payment of $60 million has been made to the company, with a second equal amount due "once the audited TTCL accounts for 2000 have been agreed," the company says.
It has also taken management control of the company.
The consortium says the $120 million payment is to be invested into the company itself and not paid to the government owners, capitalising it to build a cellular network planned to expand to 800 000 lines within four years. It has also committed to improving the existing fixed network.
MSI describes itself as a pan-African operator and has operational networks in Egypt, Uganda, Zambia, Malawi, Congo Brazzaville, Gabon, Sierra Leone, Chad and Congo Kinshasa, as well as a controlling stake in a Sudanese operator. Further networks are under construction in Guinea, Burkina Faso and Niger.
The deal may take a bite out of the growth of the four existing GSM operators in Tanzania, which includes Vodacom Tanzania (majority owned by the local Vodacom group), which reported 60 000 customers in January this year after six months in operation.
Negotiations to introduce a strategic partner to neighbouring Telkom Kenya, which involved local company Eskom Enterprises, recently stalled as the Kenyan government apparently was not satisfied by Mount Kenya Communications` offer price.
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