Emirates Telecommunications Corp (Etisalat) has submitted a binding offer to buy a 100% of Millicom’s Sri Lankan operation Tigo. The offer follows Etisalat’s failed bid for a stake in Morocco’s Meditel and underlines the firm’s determination to expand into emerging markets beyond the Gulf Arab region.
According to TeleGeography’s GlobalComms database, Tigo (formerly Celltel Lanka) introduced mobile services to Sri Lanka in 1989 when it launched an analogue ETACS network (now defunct). It was the island’s lone cellco until the arrival of competition in 1993, and held sway over the sector until the introduction of GSM services by MTN Networks (now Dialog Telekom) in 1995. Despite launching a GSM-900 network of its own in 2000, Tigo saw its market share fall steadily from 30% in 2002 to fluctuate between 17% and 15% in 2006/07, but in 2008 it resisted any further slippage in share, holding its own against its rivals, and by mid-2009 accounted for 17.5% of the country’s mobile subscriptions (with 2.2 million customers), up from 15.8% a year before.
In the second quarter of 2009 MIC announced it was looking to offload the unit as part of a wider strategic sell-off of Asian telecoms assets. Potential buyers will be bidding for a GSM network with approximately 80% population coverage and three switching centres. Etisalat is known to be keen to expand abroad amid stiff competition at home. In November last year it said it had more than USD3 billion in cash to fund purchases in 2009.