From MobileWorldLive. Story by Steve Costello.

Emerging markets mobile operator Millicom said it will buy an 85-percent stake in Zanzibar Telecom (Zantel) from UAE-based Etisalat, describing it as “a natural fit for Millicom’s strategy.”

Luxembourg-based Millicom will assume $74 million in debt and up to $32 million in net current liabilities at the time of closing.

Millicom, which was founded in Sweden in 1990, described Zantel as “the leading mobile telecom operator on the islands of Zanzibar.” Zantel’s gross revenue in 2014 was $82 million and it had 1.7 million subscribers on the islands and mainland Tanzania.

Tanzania is Millicom’s biggest market in Africa. Millicom’s Tigo operation in Tanzania has 8.7 million connections and is the third-largest player, according to GSMA Intelligence. A tie-up with Zantel will give it a greater market share than current second-placed rival Bharti Airtel, and enable it to better compete with No. 1 operator Vodacom.

Millicom has 56 million customers, mainly under the Tigo brand, in at least 14 markets in Africa and Latin America. Other African markets include Chad, DRC, Ghana, Rwanda and Senegal.

Benefits of the deal include technical synergies such as procurement and national roaming; and the potential to capitalize on mobile data demand and rollout 4G coverage.

The intention is to continue with the Zantel brand, “while delivering cash flow growth by leveraging technical and operational efficiencies.”

…The remaining 15 percent stake in Zantel is owned by the government of Zanzibar.

Read more at MobileWorldLive.