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(Bloomberg) — Axian Group Ltd. plans to invest $500 million in Tanzania following the purchase of telecommunication assets in the East African country and is seeking more deals to further expand in the region.
A consortium led by the Antananarivo, Madagascar-based conglomerate announced April 19 the purchase of Millicom International Cellular’s Tanzanian operations. Acquiring Tigo Tanzania and Zanzibar Telecom means Axian now controls one of the largest telecommunication operations in the country.
Axian’s investment would be the largest in Tanzania’s telecommunication sector in more than five years, since the government in 2014 announced Vietnam-based Viettel Group’s plan to spend $1 billion on developing infrastructure in the country.
The closely-held group will invest part of the funds in infrastructure and financial technology, according to Chief Executive Officer Hassanein Hiridjee. “We will increase our coverage, we will increase the level of our services, we are bringing new technology,” Hiridjee said in an interview. “We do think that we have to embed in the asset much more infrastructure.” he said.
Axian joins the list of companies seeking to tap into Africa’s financial technology market, where operators offer a mobile phone-linked digital wallet to facilitate services including payments, loans and insurance. MTN Group Ltd. said April 12 that it’s considering an initial public offering of its mobile-money business which it values at about $5 billion. That’s after Mastercard Inc. and TPG Holdings LP invested $300 million in Airtel Africa Plc’s mobile-money division.
Tanzania is a more competitive market than regional peers like Kenya, where a single player controls a significant part of the industry and it’s a tall order for rivals to make any gains. From Tanzania’s mobile-money subscriptions of 32.3 million as of December, Axian’s acquisitions give it immediate control of almost 30% of the pie, compared with industry leader Vodacom Tanzania’s 41%.
Axian’s telecommunications unit has invested in towers, undersea cables, data centers, financial technology as well as phone operators in Madagsacar, Reunion, Mayotte, Comoros, Senegal, Togo and Tanzania. The group has invested in other sectors including financial services, energy and real estate.
Axian wants to continue expanding in the region. “We are actively looking at other other opportunities,” Hiridjee said. “We are looking for places where our model works and we can be disruptive.”
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