Local shareholders looking to sell their Vodacom Tanzania stake
Tanzanian shareholders holding a 35% stake in domestic mobile operator Vodacom Tanzania have reportedly approached the regulator, the Tanzania Communications Regulatory Authority (TCRA), seeking permission to sell their shares to foreign investors, reports daily newspaper This Day citing ‘well-placed industry sources’ as saying. The unit, currently 65%-owned by South Africa’s Vodacom Group and Mirambo Limited of Tanzania (35%), is the nation’s largest player in terms of subscribers with a market share of 44.86% at 30 June 2008, writes TeleGeography’s GlobalComms database.
Mirambo contacted the watchdog in April this year to confirm it had acquired the 19% and 16% equity stakes held by Caspian Construction and Planetel Communications respectively.
However, it has since become embroiled in a dispute with the TCRA over who it is allowed to sell the shares to. Although Mirambo is petitioning for the right to offload the asset to foreign investors, local legislation (under the Tanzania Communications Licensing Regulations of 2005) requires that telecoms companies operating in the country must have at least one local shareholder with a minimum 35% stake in order to become eligible for a telecommunication licence.
Mirambo argues that the 35% local ownership stipulation is merely a condition for winning a licence and that there is no ongoing obligation to retain local ownership once this has been awarded. This Day goes on to say that local shareholders feel the unfair restrictions are making it difficult for them to access funding from international financial institutions and their growing impatience is making them more aggressive in terms of challenging the TCRA’s position. The matter is being discussed at government level while most recently, the Dar es Salaam Stock Exchange (DSE) yesterday asserted that any move to allow Mirambo to sell to a foreign investor ‘would not be in the best interests’ of the country.