Will The Tigo/Airtel Merger Yield the Desired Results

Will The Tigo/Airtel Merger Yield the Desired Results

Accra, October 5, 2017//-Mergers and acquisitions are not new to corporate Ghana but they are new in the country’s competitive telecoms industry.

The much-talked about Tigo and Airtel merger was approved on Monday by the National Communications Authority (NCA) with some conditions, making the new entity the second largest telecom operator by market share, assets and subscriber base.

Although the major shareholder in the new entity is yet to be known, telecoms industry analyst have pontificated the merger will cause a drastic change in the country’s telecoms industry.

According to them, the new entity  becoming the second largest operator after MTN Ghana, which controls half of the voice market, data and mobile money will wrestle with MTN for customers in all the three segments of the market.

According to the July 2017 mobile voice subscription data released by the NCA-the telecoms industry regulator, MTN currently has  17,654,968 mobile voice subscribers representing a percentage increase of 2.03% from June 2017’s figure of 17,304,425.

Its market share for the month of July 2017 was 47.54%. While Tigo’s mobile voice subscriptions increased from 5,360,443 as at the end of June 2017 to 5,510,992 as at the end of July 2017. This indicates a percentage increase of 2.81%. Their market share for the month under review was 14.84%.

Airtel’s mobile voice subscriptions decreased from 4,236,788 as at the end of June 2017 to 4,217,490 as at the end of July 2017. This represents a percentage decrease of 0.46%. Their total market share for the month under review was 11.36%.

So, adding the merged entities’ July figures together, they have 9,728,482 mobile voice subscribers, representing 26.2 percent market share of the industry as against Vodafone’s mobile voice subscriptions of 8,920,617. This brought Vodafone’s market share for June 2017 to 24.02%.

Cumulatively, the new entity beats Vodafone to become the second largest telecoms firm in the country, but it is important to acknowledge that Vodafone has an incredible growth rate and still possesses all the qualities to reclaim the two spot.

This is so because between June and July this year, Vodafone recorded more than 140,000 new subscribers, representing a more than 1.46 percent increase in its market share, according to the NCA’s July mobile voice subscriptions data.

For Vodafone, the market is exciting following the launch of its most popular promo dubbed ‘Ekiki mi’ which allows three Vodafone users to load from a recharge card and receive the same units of credits. Therefore, it will be interesting to see the mobile voice subscriptions for August, September and even October.

In the area of mobile data market share, the new entity has the upper-hand over Vodafone. The merger will afford  Airtel and Tigo the opportunity to  have a combined market share of more than 5.76 million data subscribers as compared to the 3.64 million users of Vodafone, according to NCA figures.

No name yet

After the approval of the merger by the NCA, many people are still wondering about how the new entity will be called. Some are saying that the brands-Tigo and Airtel will vanish into thin air but others have disagreed. Surprisingly, staff of the merged companies also do not know the new name of the entity.

Conditions

To ensure efficient and equitable distribution and access to the spectrum, the merged entities will have to submit a network integration plan to the NCA which will indicate how they intend to relinquish portions of their total spectrum allocation.

This, however, will be done in phases on geographical area basis and over a period not exceeding 18 months to avoid disruptions on the network, according to a press release approving the biggest telecoms industry marriage.

While on the issue of numbers, the merged entity shall retain all the numbering resources held by the merging entities, it said.

Additionally, the NCA has requested the merged entity to submit a plan to educate customers about changes and related measures within 30 days from date of merger.

‘The merger approval is also conditioned with an option for Government participation,” the NCA stated. It has meanwhile assured all stakeholders, especially consumers, that their various interests will be protected and that the  NCA will endeavour to maintain stability within the industry.

New Leadership, new focused

Although, it has not been officially announced, some industry watchers said the new merged entity is expected to be dominated by Tigo staff. This is due to the fact that Roshi Motman, the current Chief Executive Officer of Tigo is going to steer affairs of the new telco entity.

While CEO of Airtel, Lucy Quist, is expected to continue her illustrate telecom career elsewhere.  It is already in the public domain that some bigwigs of Airtel including its Head of Corporate Affairs Richard Ahiagble are not going to be part of the new entity.

Looking at the merger deeply,  Tigo brings more to the merger in terms of subscriber base, be it data or mobile. The Tigo owned by Millicom International Cellular (MIC) S.A  is also bringing to the table its towers as compared to the Indian owned Bharti Airtel, which rented towers from tower ATC, a leading tower operating in Ghana.

So, it is thus not surprising that Tigo and its staff will have a small edge over Airtel regarding the management and running of the new telecom firm. As Ms. Motman is in-charged, impeccable sources are predicting that all the key strategic positions are going to be occupied by Tigo staff.

It is a fact that with the two companies’ merger there will be a number of duplicated functions, prompting fears among staff of the two companies that they are going to be jobless.

From the above narrations, it will be difficult to say that the landmark merger in the country’s telecoms industry will yield the desired results. It is so early to say.

By Masahudu Ankiilu Kunateh, African Eye Report

Email: mk68008@gmail.com

 

Source: African Eye Report

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