Mergers, Acquisitions and Financial Results

MTN Uganda is engaged in talks with the Tanzania Telecommunications Commission (TTC) to buy the frequency vacated by Tritel following the failure by the Malaysian cellular phone company to fulfil the conditions of its licence. A senior TTC official told The EastAfrican that the commission wanted MTN Uganda to buy the frequency licence in the light of its success in Uganda as a telephone service provider.

The official said that TCC was discussing with MTN Uganda whether the frequency licence should be tendered or auctioned. "We prefer MTN Uganda because it has proved to be the most successful cellular phone provider in that country and its shareholders are also potential investors," he said.

The TTC deal with MTN Uganda follows the cessation of operations of TRI Telecommunications Ltd (Tritel) due to material breach of its operating licence. TCC’s public relations manager Issack Mruma told The EastAfrican in Dar es Salaam that the Tritel frequency licence would cease operation on February 1 and that it would be tendered or auctioned to another mobile phone service provider.

Mr Mruma said Tritel had also been ordered to pay arrears amounting to Tsh3.2 billion ($3.2 million) incurred from 1999 to 2002 as annual royalty, numbering and frequency user fees. "We asked them to pay the arrears, which they said they were unable to do and agreed to close down their operations in Tanzania," he said.

Tritel is a joint venture between VIP Engineering and Marketing of Tanzania and Technology Resources Industries Berhad (TRI) of Malaysia.

Tritel has already issued a statement asking its 17,000-plus customers to switch to Celtel Tanzania in a month’s time or claim compensation for loss of service.

MTN Uganda’s chief executive, Tom Bragaw, was non-committal on whether the company had been approached by TCC to buy Tritel.

He, however, said that ordinarily, such a proposal would have been made to MTN International, the investment arm of MTN that has spearheaded the network’s expansion to Uganda, Rwanda, Cameroon and Nigeria.

"I cannot confirm that we have been approached by TTC because decisions on opening new markets are made by MTN International not MTN Uganda," Mr Bragaw said, adding, "But if the opportunity arises and there is good value for us, we are certainly going to be interested. It would make a lot of sense for us to be in all the three East African countries." 

Nation Group