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Bharti Airtel makes concessions over Airtel Tanzania ownership

Bharti Airtel makes concessions over Airtel Tanzania ownership

Bharti Airtel has agreed to a raft of measures in order to draw a line under its ownership dispute with the government of Tanzania.

The operator group will pay Tanzania’s government TZS60 billion ($26.1 million) over the next five years, as well as absolving $407 million of debt, reported Bloomberg. In additional it will donate $1 million to development initiatives within Tanzania, appoint more Tanzanians to the unit’s board, and pay the country’s authorities an undisclosed amount as a “special dividend” by the end of the year.

The long-running dispute dates back to 2017, when the government alleged that after acquiring the unit from Zain Group, Bharti Airtel had commenced its rollout using infrastructure that had been obtained illegally under a now-defunct political administration. Relations reached their nadir at the start of 2018, when Tanzanian authorities threatened to take over ownership of the unit from Airtel.

Bharti Airtel refuted the claims, and while no official settlement was reached, the matter appeared to be resolved after talks between both parties. However, the dispute again flared up when the Indian group disclosed its plans for an IPO of Airtel Africa. The operation consists of 14 units - among them Airtel Tanzania, in which the country’s government holds a 40% stake. The Tanzanian authorities argued that they should have been consulted prior to any IPO announcement, decrying the offer as illegal.

Airtel has argued throughout that its ownership of the unit is completely legal on the basis that the government’s claim is entirely independent of its acquisition, relating as it does to before Airtel purchased the unit. Airtel even agreed to sell a further 9% holding in Airtel Tanzania to the country’s government in January this year, reducing its majority stake to 51%.

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