Reports from India say that Airtel is trying to improve its loss-making operations in Africa, where it has not made a profit since buying most of Zain’s African business in 2010 for $10.7 billion. At the same time fierce competition is making Airtel’s Indian home market even tougher than usual.
A Millicom spokeswoman told Capacity: “There are often market rumours regarding potential M&A activity – and certainly we see lots of rumours regarding Millicom. However our focus is firmly on accelerating growth and we are seeing good results.”
The Economic Times in India said it had two sources for the story, and quoted one, without identifying them, as saying: “The two companies are in discussions for a possible joint venture wherein both companies could hold equal share.”
The Economic Times’s other source compared the position with a recent transaction in Bangladesh, where Airtel combined its business with that owned by Axiata of Malaysia. Airtel has just 25% of the combined unit.
MTN is the largest operation in Ghana, with Vodafone at number two. A combination of Airtel and Millicom – which trades under the Tigo brand – would have a larger market share than Vodafone.
Airtel lost $91 million on its African operations in the most recent quarter, with income of $900 million, compared with a loss of $170 million in the equivalent quarter a year ago.
Millicom is due to give its results for the last quarter of 2016 and for the full year on 8 February. In 2015, Millicom generated revenue of $6.73 billion and adjusted EBITDA of $2.27 billion.
